Based on the model results, particularly the coefficients and p-values, write a short paragraph to explain to
Question:
Based on the model results, particularly the coefficients and p-values, write a short paragraph to explain to the Board of Directors of the Insurance company what are the characteristics of a claim that make it more likely to involve fraud.2. You want to interpret the coefficient of Annual Income in this model. Most incomes in the data range between $100,000 per year and $200,000 per year. Report the difference in probability of fraud for someone earning $200,000 compared with $100,000.3. Suppose you are comparing two claims, Claim A and Claim B.Claim A: is from a 30 year-old, the accident was reported to police, witness details were provided, and the accident took place on a weekday.Claim B: is from a 50 year-old, the accident was not reported to police, witness details were not provided, and the accident took place on a weekend.Assume other characteristics of the two claims are the same. Calculate the difference in the probability of fraud between these two claims to 2 decimal places. Make sure to show your working.4. The R-Square value in this model is 0.354. Explain what this value is measuring, its range, and comment on what we learn from it in this model.5. In Section D (Exhibit 4) we were modelling the same dependent variable, but had only one independent variable, "Driveable". The R-Square in that case was 0.006. Explain the reason for the difference between the R-Square values in SectionD and SectionE.
Financial accounting
ISBN: 978-0136108863
8th Edition
Authors: Walter T. Harrison, Charles T. Horngren, William Bill Thomas