Exam MAS-I Practice Question 127
Study guide: Exam MAS-I
A pure premium GLM is tested on a holdout sample. The holdout policies are sorted by predicted pure premium and split into five groups of equal exposure. Predicted and actual losses (in thousands) are:
| Quintile | 1 | 2 | 3 | 4 | 5 |
|---|---|---|---|---|---|
| Predicted | 200 | 300 | 400 | 520 | 780 |
| Actual | 240 | 297 | 392 | 530 | 702 |
Calculate the actual-to-predicted ratio for the quintile in which the model fits worst, measured by how far that ratio is from 1.
- A) 0.83
- B) 0.90
- C) 0.98
- D) 1.11
- E) 1.20
Answer this question and see the worked solution