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A Dichotomous Variable, One with Just Two Possible Categories, Can

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Short Answer

A dichotomous variable, one with just two possible categories, can be incorporated into a regression model via a ___________ or __________ variable x whose possible values 0 and 1 indicate which category is relevant for any particular observations.


Definitions:

Bond Premium Amortization

The gradual expense recognition over time of the premium paid above the par value for a bond.

Interest Expense

The cost incurred by an entity for borrowed funds, reflected as a charge against earnings.

Interest Rate

The Interest Rate is the proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.

Straight-Line Amortization

A method of calculating the depreciation of an asset or the repayment of a loan in equal installments over a specified period of time.

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