Exam MAS-I Practice Question 106
Study guide: Exam MAS-I
A homeowners claim-frequency model is a Poisson GLM with a log link. Its predictors are:
aoi, the amount of insurance in thousands of dollars, entered through its natural logarithm;construction, categorical with levels Frame (the base) and Masonry;prot_class, the protection class 1 to 10, entered as a single numeric term;- an interaction between
\ln(\text{aoi})and construction.
| Parameter | \hat\beta |
|---|---|
| Intercept | -5.2000 |
\ln(\text{aoi}) |
0.3000 |
| Construction: Masonry | -0.2000 |
| Protection class | 0.0500 |
\ln(\text{aoi}) \times Masonry |
0.1000 |
Calculate the expected claim frequency per house-year for a masonry home insured for $300,000 in protection class 6.
- A) Less than 0.035
- B) At least 0.035, but less than 0.050
- C) At least 0.050, but less than 0.065
- D) At least 0.065, but less than 0.080
- E) At least 0.080
Answer this question and see the worked solution
Concepts tested
- Predictor Variable
- Interaction
- Categorical Predictor
- Variable Transformation
- Poisson Regression
- Link Function