In a regression with sale price as the dependent variable, what is a common way to code the binary predictor pool present versus absent?
Correct Answer
B) As a dummy variable coded one or zero
Coding pool presence as 1 and absence as 0 is a standard binary indicator. The sale price remains the response variable. A pool-cost ratio or area percentage does not encode the stated two categories. The indicator coefficient describes a conditional fitted difference under the model; it does not by itself prove a causal pool-value adjustment.
Why This Is the Correct Answer
Coding pool presence as 1 and absence as 0 is a standard binary indicator. The sale price remains the response variable. A pool-cost ratio or area percentage does not encode the stated two categories. The indicator coefficient describes a conditional fitted difference under the model; it does not by itself prove a causal pool-value adjustment.
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Previous Question
Market data show these sale prices, from lowest to highest: $300,000, $330,000, $360,000, $390,000, $410,000, $440,000, $460,000, $480,000, $500,000, $530,000. Using the nearest-rank method, which takes the lowest price at or below which at least 20% of the sales fall, what is the 20th percentile?
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Assessment ratios for three parcels are 0.85, 1.00, and 1.15 (sample mean = 1.00). What are the population standard deviation (divide squared deviations by n) and the sample standard deviation (divide by n−1), and which is larger?