Actuarial Notes

CAS Exam MAS-II Fall 2018, Question 15

Study guide: Exam MAS-II

You are given Model 1 for the SCORE of STUDENT_ID i in CLASS_ID j.

Model Model Specification
1 SCORE_{ij} = \beta_0 + \beta_1 \times SEX_{ij} + \beta_2 \times SCORE\_PRE_{ij} + \beta_3 \times METHOD\_R_j + \beta_4 \times METHOD\_S_j + u_j + \varepsilon_{ij}

The following assumptions apply to Model 1 and the models listed under A – E:

  • u_j \sim N(0, \sigma_{\text{class}}^2)
  • \varepsilon_{ij} \sim N(0, \sigma^2)
  • All u_j, \varepsilon_{ij} are mutually independent

For hierarchical models:

  • Level 1 is Student
  • Level 2 is Classroom

Determine which of the following four hierarchical models is equivalent to Model 1.

  • A) Level 1: SCORE_{ij} = b_{0j} + \beta_1 \times SEX_{ij} + \beta_2 \times SCORE\_PRE_{ij} + u_j + \varepsilon_{ij}; Level 2: b_{0j} = \beta_0 + \beta_3 \times METHOD\_R_j + \beta_4 \times METHOD\_S_j + u_j
  • B) Level 1: SCORE_{ij} = b_{0j} + \beta_1 \times SEX_{ij} + \beta_2 \times SCORE\_PRE_{ij} + \varepsilon_{ij}; Level 2: b_{0j} = \beta_0 + \beta_3 \times METHOD\_R_j + \beta_4 \times METHOD\_S_j + u_j
  • C) Level 1: SCORE_{ij} = b_{0j} + \beta_1 \times SEX_{ij} + \beta_2 \times SCORE\_PRE_{ij} + \beta_3 \times METHOD\_R_j + \beta_4 \times METHOD\_S_j + \varepsilon_{ij}; Level 2: b_{0j} = \beta_0 + u_j
  • D) Level 1: SCORE_{ij} = b_{0j} + \beta_1 \times SEX_{ij} + \beta_2 \times SCORE\_PRE_{ij} + \beta_3 \times METHOD\_R_j + \beta_4 \times METHOD\_S_j + u_j; Level 2: b_{0j} = \beta_0 + u_j
  • E) None of (A), (B), (C), or (D) are equivalent to Model 1.

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