Maximum Likelihood Estimation
Free SOA Exam FAM (Fundamentals of Actuarial Mathematics) lesson in Parametric Estimation. 17 min read, ~2,512 words.
MLE maximizes the log-likelihood: solve the score equations, then confirm the second derivative is negative to verify a maximum. Complete data: each observation contributes. Grouped in: contributes, never a midpoint density. Right-censored at: contributes. Left-truncated at: divide the density by (the opposite operation to censoring). Combined data: multiply all individual...
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What this lesson covers
- Content
- Example 1
- Example 2
- Example 3
- Example 4
- Example 5
- Example 6
- Common Mistakes
- Check Your Understanding
- Exam Shortcuts
Learning objectives
- 3a
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