Suppose that an analyst for an insurance company is interested in using regression analysis to model the
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a. What subjective judgments, both explicit and implicit, must the analyst make in creating and using this model?
b. If X1, Diameter of Storm, is measured in miles, what is the interpretation of the coefficient β1?
c. Suppose the analyst decides to introduce a categorical variable X5, which equals 1 if the eye of the hurricane comes ashore within20 miles of the center of a large city (defined as a city with population ≥ 500,000) and 0 otherwise. How would you interpret β5?
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Related Book For
Making Hard Decisions with decision tools
ISBN: 978-0538797573
3rd edition
Authors: Robert Clemen, Terence Reilly
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