The NYSE works 5-day work per week.If we want to measure the impact of the day of the week on NYSE performance we would need:
A)7 indicator variables
B)6 indicator variables
C)5 indicator variables
D)4 indicator variables

Question

Quizplus · Accepted Answer

To measure the impact of the day of the week on NYSE performance, we would need one fewer indicator variable than the number of categories (days in this case) to avoid the dummy variable trap. Since there are 5 workdays, we need 4 indicator variables.

The NYSE Works 5-Day Work Per Week