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IAI Actuarial Core Principles · Actuarial Statistics · Purpose and function of data analysis

An insurer records the following fields for each motor policy: (i) number of claims in the year, (ii) vehicle body type (hatchback, sedan, SUV), (iii) city of registration, (iv) claim amount in rupees. Which of the following classifies these fields correctly?

Claim count is discrete numerical, body type and city are nominal categorical because they have no natural order, and claim amount in rupees is treated as continuous numerical. Only the first option assigns all four fields to those types.

  1. A(i) discrete numerical, (ii) nominal categorical, (iii) nominal categorical, (iv) continuous numericalCorrect
  2. B(i) continuous numerical, (ii) ordinal categorical, (iii) nominal categorical, (iv) discrete numerical
  3. C(i) discrete numerical, (ii) ordinal categorical, (iii) ordinal categorical, (iv) discrete numerical
  4. D(i) nominal categorical, (ii) nominal categorical, (iii) nominal categorical, (iv) continuous numerical
  5. (i) discrete numerical, (ii) nominal categorical, (iii) ordinal categorical, (iv) continuous numerical

Explanation

A claim count takes whole-number values, so it is discrete numerical. Body type and city have no natural order, so they are nominal. Claim amount is a monetary measurement treated as continuous. Option 3 wrongly treats the count as nominal.

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