IHI Insurance have conducted a multiple linear regression analysis to predict the value of the number of annual claims incurred by a motor insurance policyholder (y)based on the age of the policyholder in years (x1) and the value of the car insured in thousands of dollars (x2). The analysis was based on a random sample of 500 policyholders. The ages in the sample ranged from 16 to 70 and the values of the cars in the sample ranged from $1,100 to $52,000. The multiple linear regression equation corresponding to IHI's analysis is: y^i = 13 + (-0.5)x1i + (0.1)x2i.
Select whether the following statements regarding the multiple linear regression equation are true or false:
True False
a) Holding x2 constant, a one year increase in x1 will result in a decrease of 0.5 in the predicted value of Y. b) A 28 year old policyholder with a car worth $20,000 is predicted to make 29 claims. c) Holding x1 constant, a one thousand dollar increase in x2 will result in an increase of 0.1 in the predicted value of Y.
