As you probably know,in a given week,the NYSE (New York Stock Exchange)is generally open from Monday through Friday.If we wanted to use multiple regression method with dummy variables to study the impact of the day of the week on stock market performance,we would need ____ dummy variables.
A)5
B)52
C)4
D)3
E)365

Question

Quizplus · Accepted Answer

We only need 4 dummy variables representing each day of the week. We do not need to include a dummy variable for every date in the year (option E) or for every week of the year (option B). Option A (5 dummy variables) would include an extra unnecessary variable.

As You Probably Know,in a Given Week,the NYSE (New York