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Apr 24'24
Exercise
Determine which of the following statements is true
- Linear regression is a flexible approach
- Lasso is more flexible than a linear regression approach
- Bagging is a low flexibility approach
- There are methods that have high flexibility and are also easy to interpret
- None of (A), (B), (C), or (D) are true
Copyright 2023. The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.
Apr 24'24
Key: E
A is false, linear regression is considered inflexible because the number of possible models is restricted to a certain form.
B is false, the lasso determines the subset of variables to use while linear regression allows the analyst discretion regarding adding or moving variables.
C is false, bagging provides additional flexibility.
D is false, there is a tradeoff between being flexible and easy to interpret.
Copyright 2023. The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.