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Basic Question 4 of 6

When creating dummy variables for a categorical variable with k categories, how many dummy variables should be created?

A. k + 1
B. k - 1
C. 2k

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I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach

Andrea Schildbach

Learning Outcome Statements

formulate and interpret a multiple regression model that includes qualitative independent variables;

CFA® 2025 Level II Curriculum, Volume 1, Module 4.