Estimation, Evaluation, and Selection of Actuarial Models
Estimation, Evaluation, and Selection of Actuarial Models Estimation, Evaluation, and Selection of Actuarial Models
132 APPENDIX B. USING MICROSOFT EXCEL TM The formulas underlying this spreadsheet are given below. Note that trial values for alpha and theta have been entered (1 and 1,000). The better these guesses are, the higher the probability that Solver will succeed in finding the maximum. Selecting Solver from the Tools menu brings up the following dialog box:
133 The target cell is the location of the objective function and the “By Changing Cells” box contains the location of the parameters. These cells need not be contiguous. It turns out that clicking on “Solve” will get the job done, but there are two additional items to think about. First, the Solver allows for the imposition of constraints. They can be added by clicking on “Add” which brings up the following dialog box: The constraint α ≥ 0 has been entered. Solver does not allow the constraint we really want, which is α > 0. After entering a similar constraint for θ, the Solver dialog box looks like:
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132 APPENDIX B. USING MICROSOFT EXCEL TM<br />
The formulas underlying this spreadsheet are given below.<br />
Note that trial values for alpha <strong>and</strong> theta have been entered (1 <strong>and</strong> 1,000). The better these<br />
guesses are, the higher the probability that Solver will succeed in finding the maximum. Selecting<br />
Solver from the Tools menu brings up the following dialog box:
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