CAS Exam MAS-I Fall 2019, Question 30
Study guide: Exam MAS-I
An actuary has a data set with one predictor variable, X, and a response variable, Y. She divides the data set randomly into training and testing sets. The training subset is used to fit an ordinary least squares regression. In order to evaluate the fit, she plots the residuals from the model against the independent variable, X:
Determine which of the following enhancements to the model would most likely improve the fit to the testing data set.
- A) Linear Spline
- B) Local Regression
- C) Polynomial Regression
- D) Step Function
- E) There is no evidence that any of (A), (B), (C), (D) will improve the fit
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