Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Heath insurance comparies are generally faced with the probien of how much premium to charge the customers. Generaly, the premium charged by the company (

image text in transcribed
image text in transcribed
Heath insurance comparies are generally faced with the probien of how much premium to charge the customers. Generaly, the premium charged by the company ( P ) is decided on the basis of the age of the person (A), and the duration for which the insurance is taken (Dj). A health insurance company collects random data on 100 cusiomers. The estimated regression function is: P^i=25+0.80Aj+0.75D1 The insurance company makes the following calculasions: i=1100(P^iP^)2=8025i=1100(P^iP^)2=130.67 The R2 for the estimated regression is (Round your answer to mos decimal places:) The heath insurance compary realzes that it has not indused another determinart, the alments that the customers sulfer from, which also affects the premum charged by the compary To include this determinant, the company uses data on customers' expendsure on modicines (E), The estimated regression function is: After including the data on expenditure on medicines, the campery makns the following calculations. i=1100(PiPi)2=35.5Ai=1100(PiP)2=130.67 The R2 for this estimated regression is P^i=248+0.76Ai+0.680i+0.65Ei Aher including the data on expenditure on medicines, the company makes the following calculations: i=1100(PiPi^)2=35.58i=1100(PiP^)2=130.67. The R2 for this estimated regression is (Round your answer to two decimal placess) What is the efloct on R2 and SSR if the coeflicient of the added regressor is exacty 9 ? A. If the coefficlent of the added regressor is exactly 0, the R2 and SSR both do not change a. If the coefficient of the added regrestor is exacty 0, the R2 inceases and the SSR decreases C. If the coefficient of the added tegressor is exacty 0, the R2 dectesses and the SSR increases D. If the coefficient of the added regressor is exactly 0, both the R2 and SSR increase

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Contemporary Financial Management

Authors: R. Charles Moyer, James R. McGuigan, William J. Kretlow

11th Edition

0324653506, 978-0324653502

More Books

Students also viewed these Finance questions

Question

=+8. Describe what is meant by management by exception.

Answered: 1 week ago

Question

Coping with competitive pressure and sport performance anxiety

Answered: 1 week ago