3. Eire General Insurance has an arrangement with the reinsurance com- pany SingaporeRe, whereby the excess of any claim over M is handled by the reinsurer. Claim size is traditionally modeled by a Pareto dis- tribution with parameters o and A = 8400. Show that the maximum likelihood estimator of o based on a sample of n + m claim payments (for Eire General) of the form (21, . ..,In, M,.. ., M ) takes the form a = n/ log(1 + x;/ A) + mlog(1 + M/A) ) . 1 If the amounts paid by Eric General based on a sample of size 10 = 7+3 - n + m were (14.9, 775.7, 805.2, 993.9, 1127.5, 1602.5, 1998.3, 2000, 2000, 2000), what would the maximum likelihood estimate of a be