The Fundamental Purpose of Exploratory Factor Analysis Is To

question 2

Multiple Choice

The fundamental purpose of exploratory factor analysis is to:

• A) Test hypotheses about how variables are intercorrelated
• B) Test hypotheses about whether the correlation matrix is an identity matrix
• C) Shed light on the underlying dimensionality of constructs within a set of measures
• D) Shed light on the reliability of a set of measures

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Definitions:

Significant Loss

A considerable reduction in the value of an investment or asset, often leading to a negative impact on financial performance.

Fixed Asset

Long-term tangible property or equipment that a firm owns and uses in its operations to generate income.

Liquidity

The convenience with which one can convert an asset into cash without influencing its market price.

Financial Distress

A situation in which a company struggles to meet or has difficulty paying off its financial obligations to creditors.