SOA Exam SRM Sample Question 54
Study guide: Exam SRM
For a regression model of executive compensation, you are given:
i) The following statistics:
| Executive Compensation | ||||
|---|---|---|---|---|
| Coefficients: | Estimate | Std. Error | t-statistic | p-value |
| (INTERCEPT) | –28,595.5 | 220.5 | –129.7 | <0.001 |
| AGEMINUS35 | 7,366.3 | 12.5 | 588.1 | <0.001 |
| TOPSCHOOL | 50.0 | 119.7 | 0.4 | 0.676 |
| LARGECITY | 147.9 | 119.7 | 1.2 | 0.217 |
| MBA | 2,490.9 | 119.7 | 20.8 | <0.001 |
| YEARSEXP | 15,286.6 | 7.2 | 2132.8 | <0.001 |
ii) The acceptable significance level is α = 0.10.
Determine which predictor or predictors should be removed first prior to rerunning the model.
- A) AGEMINUS35
- B) AGEMINUS35, MBA, and YEARSEXP
- C) TOPSCHOOL
- D) TOPSCHOOL and LARGECITY
- E) YEARSEXP
Answer this question and see the worked solution