PRMIA Exam 8002 Topic 3 Question 73 Discussion

Actual exam question for PRMIA's Mathematical Foundations of Risk Measurement :II exam

Question #: 73
Topic #: 3

[All Mathematical Foundations of Risk Measurement :II Questions]

You are to perform a simple linear regression using the dependent variable Y and the independent variable X (Y = a + bX). Suppose that cov(X,Y)=10, var(X)= 5, and that the mean of X is 1 and the mean of Y is 2. What are the values for the regression parameters a and b?

Ab=0.5, a=2.5

Bb=0.5, a=1.5

Cb=2, a=4

Db=2, a=0

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Suggested Answer: D

by Marguerita at Feb 08, 2024, 04:44 PM

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Thurman

1 days ago

I disagree, I believe the correct answer is B) b=0.5, a=1.5 based on the means of X and Y given in the question.

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Ronna

2 days ago

I think the answer is A) b=0.5, a=2.5 because of the given covariance and variance values.

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