What Is Dummy Variable Modelling Used For

question 6

Multiple Choice

What is Dummy Variable Modelling used for?

• A) To transform a non-normal set of data into a normal distribution
• B) To remove outliers
• C) To include continues variables as a covariate in an ANCOVA
• D) To include variables with three of more categories as a covariate in an ANCOVA

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Definitions:

Discount Rate

The discount rate employed in discounted cash flow analysis to ascertain the present worth of future cash flows.

Annual Salary

The total amount of money that an employee earns in a year from their employer for their services.

Starting Bonus

A preliminary financial incentive given to a new employee as an enticement to join a company.

Interest Compounded

The process whereby interest is added to the principal sum, so that from that moment on, the added interest also earns interest, leading to exponential growth.