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

question 47

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.

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Definitions:

Common Stock

Equity ownership in a corporation, with voting rights and a residual claim on corporate earnings.

Treasury Stock

Stock that has been issued but has been bought back by the corporation or received as a gift.

Net Cash

Describes the amount of cash remaining after all cash expenditures, or disbursements, are subtracted from the cash receipts during a given period.

Indirect Method

A method used in accounting to calculate cash flows from operating activities, adjusting net income by changes in non-cash accounts.