Explanation

Option B is correct because:

• Logistic regression is designed for binary classification problems (yes/no, 0/1 outcomes)
• Predicting whether a company is a takeover target is a binary classification problem
• The model outputs probabilities between 0 and 1 that can be used for classification

Why other options are incorrect:

• Option A: Portfolio returns are continuous variables, better suited for linear regression
• Option C: Volatility is also a continuous measure, not appropriate for logistic regression