excans:106afb10d3: Difference between revisions
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(A) is false. Trees work better with qualitative data. | (A) is false. Trees work better with qualitative data. | ||
Latest revision as of 22:25, 26 May 2023
Key: E
(A) is false. Trees work better with qualitative data.
(B) is false. While trees accommodate nonlinear relations, as seen in (E) a linear model can work very well here.
(C) is false. The variance is constant, so that is not an issue here.
(D) is false. There is a clear relationship as noted in answer (E).
(E) is true. The points appear to lie on a quadratic curve so a model such as
[[math]]
y = \beta_0 + \beta_1 x + \beta_2 x^2
[[/math]]
can work well here. Recall that linear models must be linear in the coefficients, not necessarily linear in the variables.
Copyright 2023. The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.