6. [FINA2230 Final Exam 2020] In an insurance company, it is modelled that: The number of claims made by an individual i

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6 Fina2230 Final Exam 2020 In An Insurance Company It Is Modelled That The Number Of Claims Made By An Individual I 1 (37.08 KiB) Viewed 24 times

6. [FINA2230 Final Exam 2020] In an insurance company, it is modelled that: The number of claims made by an individual in a year after surviving coronavirus infection follows B(4, p). The prior distribution of p is a(p) = 3.75p(1 – p)0.5, 0 <p < 1. BoJo, a UK survivor of coronavirus infection, made 1 claim in a given year. (a) Find the mode of the posterior distribution of p. (b) Using Excel, find the 80% shortest credibility interval for p.