3 - CHAPTER 18 SECTION 2-3: MODEL BUILDING MULTIPLE CHOICE...

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1 CHAPTER 18 SECTION 2-3: MODEL BUILDING MULTIPLE CHOICE 76. In explaining the amount of money spent on children's clothes each month, which of the following independent variables is best represented with an indicator variable? a. Age b. Height c. Gender d. Weight ANS: C PTS: 1 REF: SECTION 18.2-18.3 77. In explaining students' test scores, which of the following independent variables would not best be represented with indicator variables? a. Gender b. Race c. Number of hours studying for the test d. Marital status ANS: C PTS: 1 REF: SECTION 18.2-18.3 78. In explaining starting salaries for graduates of accountancy programs, which of the following independent variables would not best be represented with dummy variables? a. Grade point average b. Gender c. Race d. Marital status ANS: A PTS: 1 REF: SECTION 18.2-18.3 79. In explaining the income earned by college graduates, which of the following independent variables is best represented by a dummy variable? a. Grade point average b. Age c. Number of years since graduating from high school d. College major ANS: D PTS: 1 REF: SECTION 18.2-18.3 80. If a nominal independent variable has 4 possible categories, the number of dummy variables needed to uniquely represent these categories is: a. 5. b. 4. c. 3. d. 2. ANS: C PTS: 1 REF: SECTION 18.2-18.3
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81. An indicator variable is a variable that can assume: a. one of two values (usually 0 and 1). b. one of three values (usually 0, 1, and 2). c. any number of values. d. None of these choices. ANS: A PTS: 1 REF: SECTION 18.2-18.3 82. An indicator variable is also called: a. a response variable. b. a dummy variable. c. a predictor variable. d. a dependent variable. ANS: B PTS: 1 REF: SECTION 18.2-18.3 83. In general, to represent a nominal independent variable that has m possible categories, we must create: a. ( m + 1) indicator variables. b. m indicator variables. c. ( m - 1) indicator variables. d. ( m - 2) indicator variables. ANS: C PTS: 1 REF: SECTION 18.2-18.3 84. In regression analysis, indicator variables allow us to incorporate: a. interval variables into the model. b. nominal variables into the model. c. first-order variables into the model. d. None of these choices. ANS: B PTS: 1 REF: SECTION 18.2-18.3 85. If a nominal independent variable contains 5 categories, the number of dummy variables needed to uniquely represent these categories is: a. 0. b. 4. c. 5. d. None of these choices. ANS: C PTS: 1 REF: SECTION 18.2-18.3 86. Suppose that we want to model the randomized block design of the analysis of variance with, say, one nominal variable with three categories and one nominal variable with four categories. We would create: a. 7 indicator variables. b. 6 indicator variables. c.
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This note was uploaded on 09/28/2010 for the course FINOPMGT 250 taught by Professor Kumar during the Spring '10 term at University of Massachusetts Boston.

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3 - CHAPTER 18 SECTION 2-3: MODEL BUILDING MULTIPLE CHOICE...

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