Student Solutions Manual to Accompany Loss Models: From Data to Decisions, Fourth Edition

CHAPTER 15

CHAPTER 15

15.1   SECTION 15.2

15.1 . Let W = ln Y − ln 100 = ln(Y/100). Then y = 100e^w and dy = 100e^wdw. Thus,

which is a Pareto density with α = 12 and θ = 4.801121.

15.2

which is a gamma distribution with parameters 10 + γ and . The mean is . For the mle:

for . The two estimators are equal when γ = 0 and θ = ∞, which corresponds to π(α) = α⁻¹, an improper prior.

15.3 (a)

(b) Let

Then

and the solution is . Also,

and so .

(c)

which is a normal pdf with mean and variance ...