Exam MAS-I Practice Question 97

Study guide: Exam MAS-I

A Gamma GLM for claim severity is fitted in R. territory has three levels, A, B and C, and veh_value is the vehicle's value in thousands of dollars. Part of the output:

glm(formula = severity ~ territory + log(veh_value),
    family = Gamma(link = "log"), data = claims)

Coefficients:
               Estimate Std. Error t value Pr(>|t|)
(Intercept)     5.00000    0.18000  27.778  < 2e-16 ***
territoryB      0.20000    0.05000   4.000 6.58e-05 ***
territoryC     -0.15000    0.06000  -2.500   0.0125 *
log(veh_value)  0.45000    0.04500  10.000  < 2e-16 ***

(Dispersion parameter for Gamma family taken to be 0.81)

    Residual deviance: 1580.2  on 1846  degrees of freedom

Calculate the model's expected severity for a claim in territory C on a vehicle worth $40,000.

• A) Less than 500
• B) At least 500, but less than 700
• C) At least 700, but less than 850
• D) At least 850, but less than 1,000
• E) At least 1,000

Answer this question and see the worked solution

Concepts tested

• Statistical Software
• Model Output
• Parameter Estimate Tables
• Gamma
• Link Function
• Categorical Predictor

More questions from this set

• Exam MAS-I Practice Question 96
• Exam MAS-I Practice Question 98