If a Nominal Variable Has Five Categories, an Analyst Would

question 3

True/False

If a nominal variable has five categories, an analyst would include up to four dummy variables in a regression model.

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Definitions:

Dividends

Payments made by a corporation to its shareholders, usually as a distribution of profits.

After Tax Cost

The actual cost of an investment or purchase after accounting for the effects of taxes on the price.

Corporate Tax Rate

The percentage of a corporation's profits that is paid to the government as tax.

Coupon Rate

The interest rate that a bond issuer will pay to a bondholder.