Life Expectancy an Actuary Wanted to Develop a Model to Predict

question 7

Essay

Life Expectancy
An actuary wanted to develop a model to predict how long individuals will live.After consulting a number of physicians,she collected the age at death (y),the average number of hours of exercise per week (x₁),the cholesterol level (x₂),and the number of points that the individual's blood pressure exceeded the recommended value (x₃).A random sample of 40 individuals was selected.The computer output of the multiple regression model is shown below. THE REGRESSION EQUATION IS y = 55.8 + 1.79x₁− 0.021x₂− 0.061x₃ ​ S = 9.47 ​ R−Sq = 22.5% ANALYSIS OF VARIANCE ​ ​
-{Life Expectancy Narrative} Is there enough evidence at the 1% significance level to infer that the average number of hours of exercise per week and the age at death are linearly related?

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Definitions:

Portfolio Beta

A measure of the volatility, or systematic risk, of a portfolio in comparison to the overall market.

Market Portfolio

A theoretical bundle of investments that contains all available assets in the market, used as a benchmark to assess individual investment performance.

Risk-Free Asset

A financial investment that promises a certain return without any chance of monetary loss.

Portfolio

An assortment of financial assets owned by a person or an organization.