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Which of the Following Statements About Experience Rating Is (Are)true

question 20

Multiple Choice

Which of the following statements about experience rating is (are) true?
I.The insured's past loss experience is used to determine the premium for the next policy period.
II.Its use is generally limited to small firms whose actual experience lacks credibility.


Definitions:

Level Of Significance

A statistical measure that indicates the probability of rejecting the null hypothesis when it is actually true, used to determine the reliability of a test result.

Randomized Block Design

An experimental setup that arranges subjects into blocks based on certain attributes before randomly assigning treatments, to reduce variation.

Treatments

In the context of experimentation, treatments refer to the different conditions applied to groups in an experiment to study their effects on outcomes.

Spearman's Rank Correlation

A non-parametric measure of rank correlation that assesses the strength and direction of association between two ranked variables.

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