The following information are obtained: • A portfolio contains two types of policies. Type A policies have no deductible and a policy limit u. A total of 50 losses that are less then u were recorded on Type A, y1 , y2 , … , y50, and a total of 50 losses that exceed u were also recorded on Type A. • Type B have a deductible of u and no policy limit. Losses that are less than u are not recorded on Type B policies. A total of 50 losses that exceed u were recorded on Type B policies, z1 , z, … , z50 . • The random variable X for the underlying losses for both types of policies has density function (x;theta) and (x;theta). Provide the likelihood function, L, that is used to find the MLE of theta.
