Which of the following is true of dummy variables?
A)A dummy variable always takes a value less than 1.
B)A dummy variable always takes a value higher than 1.
C)A dummy variable takes a value of 0 or 1.
D)A dummy variable takes a value of 1 or 10.

Question

Quizplus · Accepted Answer

A dummy variable is a binary variable, meaning it can only take on two values - 0 or 1. It is used to represent categorical variables in regression analysis, where a 0 indicates the absence of a particular category and 1 indicates the presence of that category. Therefore, choice C is the correct answer. Choices A, B, and D are all incorrect because they suggest that dummy variables can take on values other than 0 or 1.

Which of the Following Is True of Dummy Variables