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If Given a Choice in Collecting Data on Age for Use

question 139

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If given a choice in collecting data on age for use as an independent variable in a regression model, a decision maker would generally prefer to record the actual age rather than an age category so as to avoid using dummy variables.


Definitions:

Variable Rate

An interest rate that changes periodically over the lifetime of the loan based on an underlying benchmark or index.

Prime Rate

The interest rate that banks charge their most creditworthy customers, often used as a benchmark for other loans.

Risk Profile

An assessment of an entity's or individual's willingness to take risks, as well as the threats to which they are exposed.

Financial Risk

The potential for financial loss in an investment or business operation.

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