Exercise


ABy Admin
May 26'23

Answer

Key: C

The means for cluster 1 are (1 + 0 + 6)/3 = 2.3333 for X1 and (3 + 4 + 2)/3 = 3 for X2 and the variation is

(1 − 2.3333)2 + (3 − 3)2 + (0 − 2.3333)2 + (4 − 3)2 + (6 − 2.3333)2 + (2 − 3)2 = 22.6667.

The means for cluster 2 are (5 + 1)/2 = 3 for X1 and (2 + 6)/2 = 4 for X2 and the variation is

(5 − 3)2 + (2 − 4)2 + (1 − 3)2 + (6 − 4)2 = 16.

The total within-cluster variation is (per equation (10.12) in the first edition of ISLR)

2(22.6667 + 16) = 77.33.

Copyright 2023. The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.

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