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Hello I would like to understand the steps until reach to the solution below 10. An insurance company has a set of n risks (i

Hello I would like to understand the steps until reach to the solution below

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10. An insurance company has a set of n risks (i = 1, . .. , n) for which it has recorded the n claims per year, Yij, for m years (j = 1, . .. , m). (a) Suppose the Yij (j = 1, . .. , m) follows a Poisson distribution with mean exp(B;). how to find the maximum likelihood estimate for Bi. (b) The model in part (a) of this question is a generalised linear model (GLM). Briefly this problem is formulated as a GLM. solution (a) The loglikelihood function is 1(B) = EE(vijBi - exp(beta;) - log(yij!)) i=1 j=1 Then we need to solve al m aBi Lyij - mexp(beta;) = 0 We then have B: = log(m-' yij) j=1 (b) Model is Yij ~ Poisson(Hij) and use link function log(Mij) = Bi

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