The Amount of Variance a Variable Shares with Other Variables

question 39

Short Answer

The amount of variance a variable shares with other variables is called
a) communality
b) factor loading
c) factor score
d) none of the above

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Definitions:

Risk-Return Trade-Off

The principle that potential return rises with an increase in risk, describing the balance between the desire for the lowest possible risk and the highest possible returns.

Leverage

The use of various financial instruments or borrowed capital, such as margin, to increase the potential return of an investment.

Hedge Fund Advantage

A benefit unique to hedge funds, often referring to their ability to employ diverse and complex strategies to achieve higher returns compared to traditional investment vehicles.