Factor Analysis Allows One to Cluster Variables Together in the Search

question 29

True/False

Factor analysis allows one to cluster variables together in the search for basic personality units.

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Definitions:

Return

The increase or decrease in value of an investment during a set period, represented as a percentage of the investment's starting price.

S&P/TSX Composite Index

A market index representing the performance of the Canadian stock market, compiled by the Standard & Poor’s company.

Diversifiable Risks

Risks associated with individual investments that can be reduced or eliminated through portfolio diversification.

Individual Firm

An independently owned and operated company that is limited in size and in revenue depending on the industry.