Consider a regression study involving a dependent variable y, a quantitative independent variable x1, and a categorical independent variable with three possible levels (level 1, level 2, and level 3). How many dummy variables are required to represent the categorical variable? Consider the following regression equation relating x 1 and the categorical variable to y. E(y) = 0 + 1 x 1 + 2 x 2 + 3 x 3