Question

***PLEASE ANSWER ALL QUESTIONS***

Question 21 (1 point)

While attempting to measure its risk exposure for the upcoming year, an insurance company notices a trend between the age of a customer and the number of claims per year. It appears that the number of claims keep going up as customers age. After performing a regression, they find that the relationship is (number of claims per year) = 2.579*(age) + 3.369. Interpret the slope.

Question 21 options:

	1) When number of claims per year increases by 1 claim, age increases by 3.369 years.
	2) When age increases by 1 year, number of claims per year increases by 3.369 claims per year.
	3) We are not given the dataset, so we cannot make an interpretation.
	4) When age increases by 1 year, number of claims per year increases by 2.579 claims per year.
	5) When number of claims per year increases by 1 claim, age increases by 2.579 years.

Question 22 (1 point)

Suppose that for a typical FedEx package delivery, the cost of the shipment is a function of the weight of the package measured in ounces. You want to try to predict the cost of a typical shipment given package dimensions. If 10 packages in a city are sampled and the regression output is given below, what can we conclude about the slope of weight?

Question 22 options:

	1) Since we are not given the dataset, we do not have enough information to determine if the slope differs from 0.
	2) The slope is equal to 0.
	3) The slope significantly differs from 0.
	4) The slope is 0.327 and therefore differs from 0.
	5) Not enough evidence was found to conclude the slope differs significantly from 0.

Answer 1

21. Here regression is (number of claims per year) = 2.579*(age) + 3.369

As we know regression is of form y=slope*x+intercept

So slope value is 2.579 which means for every increase in x, there is corresponding 2.579 increase in y.

Correct answer is

When age increases by 1 year, number of claims per year increases by 2.579 claims per year.

22. Here regression output is not given, so can't find answer