For the Factor Analysis to Be Appropriate,the Variables Must Be

question 7

True/False

For the factor analysis to be appropriate,the variables must be correlated.

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Definitions:

Pledged

Assets or collateral that a borrower offers to a lender to secure a loan, which the lender may seize if the loan is not repaid.

Default Risk

The risk of loss to a lender from the borrower’s failure to pay the full amount due including interest and principal.

Commercial Paper

An unsecured, short-term debt instrument issued by corporations, typically used for the financing of accounts receivable, inventories, and meeting short-term liabilities.

Bank Loan

A sum of money lent by a bank to a borrower at an interest rate, which is to be repaid with interest according to the terms of the loan agreement.