Factors That Affect the Predictability of Claims Loss Exposure Include

question 29

Multiple Choice

Factors that affect the predictability of claims loss exposure include

• A)unexpected increases in inflation.
• B)the frequency and severity of loss.
• C)the concept of long-tail risk.
• D)property versus liability coverage.
• E)All of the options.

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Definitions:

Scatter Diagram

A graphical representation used to show the relationship between two variables, often to identify potential correlations or patterns.

Least-Squares Regression

The least-squares regression is a statistical method used to determine a line of best fit by minimizing the sum of squares created by a mathematical function.

Curvilinear Cost

A cost behavior that does not consistently increase or decrease but varies based on changes in activity level, illustrating a non-linear relationship.

Mixed Cost

A cost that contains a combination of fixed and variable components and changes in total with the level of output or activity.