Actuarial Notes

CAS Exam MAS-I Spring 2018, Question 32

Study guide: Exam MAS-I

Two different data sets were used to construct the four regression models below. The following output was produced from the models:

Data Set Model Dependent variable Independent variables Total Sum of Squares Residual Sum of Squares
A 1 Y_A X_{A1}, X_{A2} 35,930 2,823
A 2 X_{A1} X_{A2} 92,990 7,070
B 3 Y_B X_{B1}, X_{B2} 27,570 13,240
B 4 X_{B1} X_{B2} 87,020 34,650

Determine which one of the following statements best describes the data.

  • A) Collinearity is present in both data sets A and B.
  • B) Collinearity is present in neither data set A nor B.
  • C) Collinearity is present in data set A only.
  • D) Collinearity is present in data set B only.
  • E) The degree of collinearity cannot be determined from the information given.

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