What Is the Purpose of an Indicator Variable in a Regression

Multiple Choice

What is the purpose of an indicator variable in a regression model?

A) An indicator variable allows us to increase our R-squared value.
B) An indicator variable allows us to include quantitative variables in our model.
C) An indicator variable allows us to fix violations of our constant variance assumption.
D) An indicator variable allows us to fix violations of our normality assumption.
E) An indicator variable allows us to include categorical variables in our model.