After Performing a Principal Components Analysis, a Researcher Finds That

question 30

True/False

After performing a principal components analysis, a researcher finds that the cumulative variance explained by the solution is 0.56.He can increase the explained variance by performing a varimax rotation.

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Definitions:

Risk Premium

The extra return expected by an investor for holding a risky asset instead of a risk-free asset.

Expected Return

The average return an investor anticipates on an investment which is uncertain, based on the probable returns.

States of Economy

The various conditions that can describe an economy, including growth, recession, depression, and recovery.