When a categorical variable has 5 levels,________ dummy variables need to be added to the model.
A)5
B)0
C)4
D)2

Question

Quizplus · Accepted Answer

When a categorical variable has k levels, k-1 dummy variables need to be added to the model to avoid perfect multicollinearity, where k is the number of levels of the variable. In this case, a categorical variable with 5 levels would require 5-1=4 dummy variables to be added to the model. Therefore, the correct answer is C) 4.

When a Categorical Variable Has 5 Levels,________ Dummy Variables Need