Skip to content

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

Which of the following best distinguishes inferential analysis from predictive analysis in an actuarial setting?

Inferential analysis uses a sample to draw conclusions about a population or its parameters, while predictive analysis estimates outcomes for new or future observations. Merely summarising observed data is descriptive analysis, not inferential.

  1. AInferential analysis draws conclusions about a population or parameters from a sample, whereas predictive analysis estimates outcomes for new or future observationsCorrect
  2. BInferential analysis only summarises the data in hand, whereas predictive analysis tests hypotheses
  3. CInferential analysis never uses probability models, whereas predictive analysis always does
  4. DInferential analysis uses only categorical data, whereas predictive analysis uses only numerical data
  5. Inferential analysis is carried out after the event, predictive analysis before data collection

Explanation

Inferential analysis uses sample data to make statements about population parameters, with measures of uncertainty such as confidence intervals or tests. Predictive analysis focuses on forecasting values for new observations. The summarising role belongs to descriptive analysis.

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