An example of a dummy variable is used in categorical data applications and might include

options a) assigning a1 to the probability of the customer receiving a $10 gift card and a 0 to the customer receiving a $20 gift card, when 10 of each denomination are being sent to a random sample of customers.

b) assigning the number 1 to Democrats and 2 to Republicans.

c) assigning the number 1 to the first place runner, and 2 to the second place runner.

d) assigning a 0 to students who can run a 10-minute mile, and a number 1 to students who run a 7-minute mile,