Question

Question 2 (1 point)

While attempting to measure its risk exposure for the upcoming year, an insurance company notices a trend between the age of a customer and the number of claims per year. It appears that the number of claims keep going up as customers age. After performing a regression, they find that the relationship is (claims per year) = 0.272*(age) + 2.606. If a customer is 57 years old, how many claims would you expect them to make in a given year?

Question 2 options:

1)

148.81

2)

199.98

3)

15.5

4)

18.11

5)	We do not know the observations in the data set, so we cannot answer that question.

Question 3 (1 point)

Suppose that for a typical FedEx package delivery, the cost of the shipment is a function of the weight of the package. You find out that the regression equation for this relationship is (cost of delivery) = 2.011*(weight) + 5.347. Interpret the slope.

Question 3 options:

1)	When cost of delivery increases by 1 dollar, weight increases by 2.011 pounds.

2)	We are not given the dataset, so we cannot make an interpretation.

3)	When cost of delivery increases by 1 dollar, weight increases by 5.347 pounds.

4)	When weight increases by 1 pound, cost of delivery increases by 2.011 dollars.

5)	When weight increases by 1 pound, cost of delivery increases by 5.347 dollars.

Question 4 (1 point)

Suppose that for a typical FedEx package delivery, the cost of the shipment is a function of the weight of the package. You find out that the regression equation for this relationship is (cost of delivery) = 0.91*(weight) + 5.87. If a package you want to ship weighs 19 ounces and the true cost of the shipment is $7.49, what is the residual?

Question 4 options:

1)

-11.51

2)

-15.67

3)

15.67

4)

-4.16

5)

11.51

Question 5 (1 point)

Suppose that in a certain neighborhood, the cost of a home (in thousands) is proportional to the size of the home in square feet. The regression equation quantifying this relationship is found to be (price) = 0.042*(size) + 32.418. You look more closely at one of the houses selected. The house is listed as having 2268.006 square feet and is listed at a price of $105.669 (thousand). The residual is -22.005. Interpret this residual in terms of the problem.

Question 5 options:

1)	The square footage is 22.005 square feet larger than what we would expect.

2)	The square footage is 22.005 square feet less than what we would expect.

3)	The price of the house is 105.669 thousand dollars less than what we would expect.

4)	The price of the house is 22.005 thousand dollars greater than what we would expect.

5)	The price of the house is 22.005 thousand dollars less than what we would expect.

Answer 1