If a Categorical Independent Variable Contains 4 Categories,then _____ Dummy

question 24

Multiple Choice

If a categorical independent variable contains 4 categories,then _____ dummy variable(s) will be needed to uniquely represent these categories.

• A)1
• B)2
• C)3
• D)4

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Definitions:

Original Principal

The initial amount of money borrowed or invested, before the addition of interest or profits.

Compounded Annually

A method of calculating interest where the interest rate is applied once per year to the principal, including any interest from previous periods.

Interest Rate

The percentage at which interest is paid by a borrower for the use of money that they borrow from a lender.

Compounded Monthly

A method of calculating interest where the interest earned is added to the principal, and the total becomes the basis for calculation in the subsequent month.