Three Qualitative Variables Need to Be Incorporated into a Regression

question 104

True/False

Three qualitative variables need to be incorporated into a regression model. The first variable has 5 possible categories, the second one has 3 possible categories, and the third one has 2 possible categories. Based on this information, ten dummy variables need to be included in the regression model.

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Definitions:

Appraisal Clause

A provision in insurance policies allowing for a neutral party to determine the value of property or the extent of damage in case of disagreement.

Insurance Policy

A contract between an insurance company and the policyholder which outlines the terms, coverage, and conditions under which the insurer agrees to compensate the insured for losses.

Impartial

Not biased, fair; not favoring one side over another.

Insurable Interest

Insurable Interest is a principle requiring that a person purchasing insurance has a stake in the safety and protection of the insured object or individual against loss or damage.