Exam MAS-I Practice Question 140

Study guide: Exam MAS-I

For six commercial auto fleets, an analyst records the number of vehicles $x$ and the loss cost per vehicle $y$ (in hundreds):

Fleet	1	2	3	4	5	6
Vehicles $x$	1	2	3	4	5	20
Loss cost $y$	4.1	3.8	4.4	3.9	4.2	9.0

The sample correlation of the six pairs is $r = 0.979$ .

Which conclusion is best supported?

A) Loss cost rises steadily with fleet size across the whole range of the data
B) Fleet 6 has a large residual from the fitted line and should be removed as an outlier
C) The high $r$ rests on fleet 6 alone; among the other five fleets, loss cost barely moves
D) Since $r^2 = 0.96$ , fleet size explains 96% of the variation in loss cost at every fleet size
E) Since $r$ is near 1, adding vehicles to a fleet causes its loss cost per vehicle to rise

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