Actuarial Notes

CAS Exam MAS-I Spring 2018, Question 26

Study guide: Exam MAS-I

You are given the following daily temperature readings, which are modeled as a function of two independent variables:

Observation Temperature X_1 X_2
1 5 4 6
2 10 8 2
  • The data set consists of only these two observations.
  • The first principal component loading for X_1, \phi_{11}, is 0.750.
  • The first principal component loading for X_2, \phi_{21}, is positive.

Calculate the principal component score for Observation 1.

  • A) Less than 0.00
  • B) At least 0.00, but less than 0.20
  • C) At least 0.20, but less than 0.40
  • D) At least 0.40, but less than 0.60
  • E) At least 0.60

Answer this question and see the worked solution

Concepts tested

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