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Post Info TOPIC: dummy variables rule


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dummy variables rule
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Hello,

 

confused by this rule:

 

“when we want to distinguish between n classes we must use n-1 dummy variables”

 

what does this exactly mean?  

 

 

 Thank you

 

 

I didn't find the right solution from the Internet.

Reference https://www.analystforum.com/forums/cfa-forums/cfa-level-ii-forum/91360825

 

Video Campaign Example

 

 



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