Dummy Variables Take on the Values of ________ and Are

question 18

Multiple Choice

Dummy variables take on the values of ________ and are used to model the effects of different levels of qualitative variables.

• A) 1 or −1
• B) 1 or 2
• C) 0 or 2
• D) 0 or 1

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Definitions:

Standard Deviation

An index quantifying how much data points deviate or scatter from their average.

Mean

The average of a set of numbers, calculated by adding them together and then dividing by the number of numbers.

Value

The degree of importance, worth, or usefulness of something.

Plowback Ratio

The proportion of earnings retained by a company after dividends have been paid, for reinvestment in its core business.