SOA Exam SRM Sample Question 9
Study guide: Exam SRM
A classification tree is being constructed to predict if an insurance policy will lapse. A random sample of 100 policies contains 30 that lapsed. You are considering two splits:
Split 1: One node has 20 observations with 12 lapses and one node has 80 observations with 18 lapses.
Split 2: One node has 10 observations with 8 lapses and one node has 90 observations with 22 lapses.
The total Gini index after a split is the weighted average of the Gini index at each node, with the weights proportional to the number of observations in each node.
The total entropy after a split is the weighted average of the entropy at each node, with the weights proportional to the number of observations in each node.
Determine which of the following statements is/are true.
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I. Split 1 is preferred based on the total Gini index.
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II. Split 1 is preferred based on the total entropy.
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III. Split 1 is preferred based on having fewer classification errors.
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A) I only
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B) II only
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C) III only
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D) I, II, and III
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E) The correct answer is not given by (A), (B), (C), or (D).
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