Tutorial 4 question 1i.

I have answered all the other parts of this question, but am struggling to properly define the concept of smoothness. Please help :)

Login

+1 vote

Recall from MAM1000W that you defined how smooth a curve is, that is, does it progress in a “nice” manner from age to age, without too many “bumps”. Think about an exponential function or a logarithmic function - there are smooth. A polynomial of a very high degree, however, will not be smooth (Google a picture of this one).

Now, smoothness refers to the opposite of adherence to data. Let’s say that we plot our crude rates (as shown on the slides), and fit a curve through them. Then, this fitted curve will be very rough and not smooth, but WILL adhere to the data very well (since it passes through every data point). If the curve is less jagged and more smooth, chances are that it will not pass through each and every data point, meaning that we have less adherence to data.

And hopefully this little example illustrates why smoothness and adherence to data are conflicting objectives!

- All categories
- BUS 1003H - Introduction to Financial Risk (43)
- BUS 2016H - Financial Mathematics (53)
- BUS 3018F - Models (69)
- BUS 3024S - Contingencies (61)
- BUS 4028F - Financial Economics (21)
- BUS 4027W - Actuarial Risk Management (46)
- BUS 4029H - Research Project (5)
- Mphil (1)
- Calculus and Pure Mathematics (4)
- Statistics (16)

...

Thank you Mario... I understand the conflict arising between the two concepts. I thought the question required a formal definition of smoothness. But it is clearer now