What is a derived variable?

A derived variable is indeed created from existing data through calculations or transformations applied to one or more original variables. This process allows for new insights or relationships to be analyzed that may not be immediately apparent from the original data alone. For instance, in a dataset containing sales data, you might create a derived variable for revenue per item sold by dividing total revenue by the number of items sold. This new variable can then be used to gain insights into sales performance without having to refer back to the original datasets.

Other options are not representative of what a derived variable is. A variable with missing values does not provide new information through derivation but indicates data quality issues. A variable that cannot be analyzed lacks the necessary properties or integrity to offer meaningful insights. Finally, a variable used for storing text only does not imply any calculation or derivation from existing data, and it limits the type of data representation to text. Thus, the definition of a derived variable very specifically encompasses the creation of new variables from existing data, making the correct choice clearly focused on this transformation aspect.