Page 254 - RISK Management IC 86

Risk Management

(vii) The class width is defined as the difference between
the lower class limit of one class and lower limit of
the succeeding class. Although, it is normally desirable
to subdivide the total range of the data into equal class
intervals, often this is not produce a sensible
representation of loss statistics because of the nature
of the data. For e.g, it is unusual for losses to be
evenly distributed by size. In such circumstances,
smaller class interval should be used in observations
have plentiful and larger intervals for the remainder
of the range.

(viii) In order to use the data divided into classes, it is
necessary to ascribe some value which will apply to
all the members of a given class. In the value in the
class interval could be chosen, but generally the
midpoint is used, it being the most representative value
unless the observations are biased towards any one
end of the class interval.

Q5. Write short notes on:
(a) Personal risk management - Refer Answer to Q1

November 2005

(b) Corporate risk attitudes - Refer Q7b May 2006

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