Actuarial Notes

CAS Exam MAS-II Spring 2019, Question 11

Study guide: Exam MAS-II

Joe wants to use a Linear Mixed Model to determine if the use of any fertilizer results in a significantly different apple weight. After recording his observations for ten trees within the orchard, he has a dataset with the following form:

Tree ID Treatment Apple Count Trunk Diameter (cm) Apple ID Apple Weight (g) Red Apple Green Apple
1 Control 20 14 1 83 Y N
1 Control 20 14 2 65 Y N
1 Control 20 14 3 76 Y N
1 Control 20 14 4 69 N Y
1 Control 20 14 5 87 N Y
… … … … … … … …
10 Brand K 18 18 178 94 Y N
10 Brand K 18 18 179 102 Y N

He has provided some notes to accompany his dataset:

  • TREE ID and APPLE ID are both identifiers of the observation and therefore not considered to be covariates.
  • The trees were either left untreated or treated with one of two brands (J or K).
  • APPLE COUNT is the number of apples on a given tree.
  • The apple can be only one of two colors: red or green.

You are given:

I. The apple dataset is an example of a two-level clustered dataset. II. Including the Control Treatment in the intercept estimate and modeling Brand K and Brand J effect as the difference between the Control and the effect for Brand K or the difference between the intercept and Brand J will result in intrinsic aliasing. III. If \beta_1 and \beta_2 represent the coefficients of the fixed effects associated with treatment, TREAT_J and TREAT_K, respectively, then the null and alternative hypotheses are as follows:

Null Hypothesis: $H_0: \beta_1 = 0$ and $\beta_2 = 0$

Alternative Hypothesis: $H_1: \beta_1 \neq 0$ or $\beta_2 \neq 0$

Determine which of the preceding statements are true.

  • A) I only
  • B) II only
  • C) III only
  • D) I, II and III
  • E) The answer is not given by (A), (B), (C), or (D)

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