Question

The following model test the effect of Credit Score and Student status on Insurance Premium (response variable): Insurance Premium is in $ and Credit Score is in number of units (increasing implies better credit worthiness and lower default risk). Student is a dummy variable, which is equal to 1 if a person is student and 0 if the person is non- student. Coefficient t-statistic p-value Intercept 105.2 -13.64 <0.000 Student 20.1 3.92 <0.000 Credit Score -4.17 5.54 <0.000 Credit Score * Student -0.78 1.33 0.18 What is the effect of being a Student on Insurance Premium? Choose one from below: Students will have on average 20.1 higher insurance premium as compared to non- students. Students will have on average -0.78 lower insurance premium as compared to non- students. The difference of insurance premium for students vs. non-students is not significant as p-value>0.1 Students will have on average 105.2 higher insurance premium as compared to non- students.

Answer 1

Option 4 the correct answer

That is, The total effect of credit score on insurance premium for student is 105.20

That means, Students will have on average 105.20 higher insurance premium as compared to non-students.