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A researcher builds a model in which a firm s liquidity ratio depends on the firm s profitability ratio and a dummy variable

 
  • A researcher builds a model in which a firm’s liquidity ratio depends on the firm’s profitability ratio and a dummy variable indicating whether the firm is listed on the stock exchange. In a second model,the researcher allows the firm’s listing status to influence the relation between its profitability and liquidity ratio. Explain how the researcher can build these two model.

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