If It Is Desired to Include Marital Status in a Multiple

question 88

Multiple Choice

If it is desired to include marital status in a multiple regression model by using the categories single,married,separated,divorced,widowed,what will be the effect on the model?

• A)One more independent variable will be included.
• B)Two more independent variables will be included.
• C)Three more independent variables will be included.
• D)Four more independent variables will be includeD.
• E)Five more independent variables will be included.

Recognize the effect of changes in data on the F-statistic and the overall ANOVA test.

Discuss the implications of significant and non-significant results in one-way ANOVA.

Compare and contrast t-tests and ANOVA for analyzing differences between group means.

Apply post-hoc analysis techniques for multiple comparisons in one-way ANOVA settings.

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Definitions:

Security Market Line (SML)

Positively sloped straight line displaying the relationship between expected return and beta.

Arbitrage Pricing Theory (APT)

An equilibrium asset pricing theory that is derived from a factor model by using diversification and arbitrage. It shows that the expected return on any risky asset is a linear combination of various factors.

Arbitrage Pricing Theory (APT)

A financial model that estimates the price of assets based on the relationship between their expected return and macroeconomic factors that influence all assets' returns.

Market Risk Premium

The surplus return an investor aspires to earn by holding onto a market portfolio fraught with risks as compared to safeguarded, risk-free assets.