A Variable That Can Assume Only One of Two Possible

question 11

Multiple Choice

A variable that can assume only one of two possible outcomes that take on the values of either 0 or 1,and is used to incorporate the effect of qualitative variables in a regression model,is referred to as ________.

• A)a dummy variable
• B)a constant endogenous variable
• C)an interaction
• D)a constant

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Definitions:

Hurdle Rate

The lowest acceptable profit that a project or investment must generate to meet the requirements of a manager or investor.

Projected Cash Flows

Estimates of the amount of money expected to flow in and out of a business over a future period.

Time Value of Money

The principle that a dollar received today is worth more than a dollar received in the future, due to its potential earning capacity.