PRMIA Exam 8007 Topic 1 Question 62 Discussion

Actual exam question for PRMIA's Mathematical Foundations of Risk Measurement ? 2015 Edition exam

Question #: 62
Topic #: 1

[All Mathematical Foundations of Risk Measurement ? 2015 Edition 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 Sue at Nov 24, 2023, 11:42 PM

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