An insurance company is estimating the risk model based on customer age is define as R =
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An insurance company is estimating the risk model based on customer age is define as R = aebx where a is a fixed constant and b is a constant that depends on the customer age. They categorize the age into 5 categories as age < 10 with b = 0.05, 10 < age ≤ 20 with b = 0.02, 20 < age ≤ 30 with b = 0.01, 30 < age ≤ 40 with b = 0.03 and age > 40 with b = 0.08. Sketch the graphs for each model and interpret them. Are the graphs reasonable?
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