Exam MAS-I Practice Question 162
Study guide: Exam MAS-I
Average claim severity (in $000) is fitted as a quadratic in vehicle age x (years):
\hat f(x) = 2.8 + 0.75x - 0.04x^2The estimated covariance matrix of (\hat\beta_0, \hat\beta_1, \hat\beta_2) is
\hat{\mathbf{C}} = \begin{bmatrix} 0.16 & -0.035 & 0.0015 \\ -0.035 & 0.010 & -0.0006 \\ 0.0015 & -0.0006 & 0.0001 \end{bmatrix}Calculate the upper limit of the approximate 95% pointwise band \hat f(6) \pm 2\,\text{SE}\big[\hat f(6)\big].
- A) Less than 6.10
- B) At least 6.10, but less than 6.60
- C) At least 6.60, but less than 6.95
- D) At least 6.95, but less than 7.30
- E) At least 7.30
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