What Are Dummy Variables and How Are They Used in the GLM

question 8

Essay

What are dummy variables and how are they used in the GLM?

Comprehend the parameters and properties of the F distribution.

Know the mean, median, mode, and range of the standard normal distribution and understand its properties.

Understand the mechanism of dehydrohalogenation reactions to form alkenes.

Comprehend the factors affecting boiling points in organic compounds.

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Definitions:

Cyclical Beta

A measure of how sensitive a stock's price is to economic cycles, with higher values indicating greater sensitivity.

Market Risk Premium

The additional return over the risk-free rate that investors require to compensate them for the risk of holding a risky market portfolio.

Countercyclical Beta

Countercyclical beta refers to the measure of an asset’s return sensitivity in opposition to market trends, often gaining value in downturns.

Fama-French Three-factor Model

An asset pricing model that expands on the capital asset pricing model by including size risk and value risk factors in addition to market risk.