Exam MAS-I Practice Question 126
Study guide: Exam MAS-I
A linear regression of pure premium Y on driver age, territory index and vehicle symbol x_3 is fitted by least squares to seven risk groups. On its own, a simple regression of Y on x_3 has slope 1.35.
The added variable plot for x_3 has these seven points, where e_{x_3} is the residual from regressing x_3 on driver age and territory index, and e_Y is the residual from regressing Y on driver age and territory index:
| Group | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
e_{x_3} |
-3 | -2 | -1 | 0 | 1 | 2 | 3 |
e_Y |
-1.6 | -4.8 | 2.0 | 1.4 | 0.2 | -1.4 | 4.2 |
Calculate the coefficient of x_3 in the full three-predictor regression.
- A) Less than 0.40
- B) At least 0.40, but less than 0.55
- C) At least 0.55, but less than 0.70
- D) At least 0.70, but less than 0.90
- E) At least 0.90
Answer this question and see the worked solution