Actuarial Notes

CAS Exam MAS-I Spring 2019, Question 38

Study guide: Exam MAS-I

Determine which one of the following statements regarding Generalized Additive Models (GAMs) is false.

  • A) Natural Splines, Regression Splines, Smoothing Splines, Local Regression, Polynomial Regression, and Step Functions are all types of models that can be used as building blocks for GAMs.
  • B) A limitation of GAMs is that interactions cannot be added to the model.
  • C) The smoothness of a continuous predictor variable can be summarized via degrees of freedom.
  • D) GAMs are a useful representation if we are interested in inference, since you can examine the effect of the predictor variables on the response while holding all of the other predictor variables constant.
  • E) GAMs allow for non-linear relationships between each predictor variable and the response.

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