Skip to content

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

In the data analysis process followed in actuarial work, which of the following best describes the purpose of the first stage, before any data is collected or modelled?

The first stage is defining the objectives of the analysis and the questions to be answered. This guides which data to collect and which methods to use. Modelling, validation and reporting all come later, once the purpose of the exercise is clear.

  1. AFitting the most complex model available to the data
  2. BDefining the objectives of the analysis and the questions to be answeredCorrect
  3. CPresenting final results to the client
  4. DValidating the model against out-of-sample data
  5. Selecting the significance level for every test

Explanation

The data analysis process starts by defining the aim of the analysis, which guides what data are needed and which methods are suitable. Modelling, validation and presentation come later, and the significance level is chosen only when a test is designed.

Did you get it right without looking?

One question tells you little. A timed set on Purpose and function of data analysis shows your real accuracy, how long you take and where you lose marks.

Practise Purpose and function of data analysisFree diagnostic mock

More Purpose and function of data analysis questions