Once They Are Evaluated and Forecasted, Loss Frequency and Loss

question 4

Short Answer

Once they are evaluated and forecasted, loss frequency and loss severity are used as the vertical and horizontal lines in the _____ for one specific risk exposure.

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Definitions:

Two-sided Test

A hypothesis test in which the critical area of a distribution is two-sided and tests whether a sample is either greater than or less than a certain range of values.

One-sided Test

A hypothesis test in which the alternative hypothesis specifies either an increase or a decrease, but not both.

P-value

The probability of obtaining a statistical summary (e.g., the difference in means) at least as extreme as the one observed in a study assuming the null hypothesis is true.

Two-sided Significance Tests

Statistical tests that assess the significance of an effect in either direction, allowing for the evaluation of both positive and negative differences.