PRMIA Exam 8002 Topic 2 Question 77 Discussion

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

Question #: 77
Topic #: 2

[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 Bettina at Apr 23, 2024, 07:46 PM

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Linsey

3 days ago

So, the answer is A) b=0.5, a=2.5.

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Vernell

4 days ago

Yes, and the value of a is 2.5.

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Justine

5 days ago

I think the value of b is 0.5.

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