BACHELOR OF BUSINESS ADMINISTRATION

BUSINESS ADMINISTRATION

BUSINESS ANALYTICS

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
A variable used to model the effect of categorical independent variables in a regression model which generally takes only the value zero or one is called ____
A
a residual
B
the coefficient of determination
C
a dummy variable
D
interaction
Explanation: 

Detailed explanation-1: -In regression analysis, a dummy variable (also known as indicator variable or just dummy) is one that takes the values 0 or 1 to indicate the absence or presence of some categorical effect that may be expected to shift the outcome.

Detailed explanation-2: -Predictor variable is the name given to an independent variable used in regression analyses.

Detailed explanation-3: -Logistic regression describes the relationship between a set of independent variables and a categorical dependent variable.

Detailed explanation-4: -Categorical variables require special attention in regression analysis because, unlike dichotomous or continuous variables, they cannot by entered into the regression equation just as they are. Instead, they need to be recoded into a series of variables which can then be entered into the regression model.

Detailed explanation-5: -A dummy variable is a variable created to assign numerical value to levels of categorical variables. Each dummy variable represents one category of the explanatory variable and is coded with 1 if the case falls in that category and with 0 if not.

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