Thread: Need formula for the expected value between two points in a lognormal distribution
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Old November 22nd, 2008, 07:10 PM
awkward awkward is offline
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Originally Posted by Steve_J View Post
I'd greatly appreciate any help with this insurance-related math question:

I have the average and the standard deviation of a set of claims ranging between $5,000 and $100,000. My data has no claims in it with values under $5,000 nor does it have any claims in it with values in excess of $100,000. If I'm willing to assume that the overall claim distribution is lognormal, how can I use the average and standard deviation for this limited set of data to derive the mu and sigma for the entire distribution?

Thanks in advance for any and all help!

- Steve J
Hi Steve J,

The Wikipedia article on the log-normal distribution,

Log-normal distribution - Wikipedia, the free encyclopedia,

gives formulas for mu and sigma in terms of the distribution's mean and standard deviation.
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