The Purpose of Factor Analysis Can Be Best Described As

question 15

Multiple Choice

The purpose of factor analysis can be best described as:

• A)data simplification by summarizing the information contained in a large number of variables into summary measures.
• B)presenting the relationship between multiple categorical measures in a low-dimensional diagram.
• C)assessing the significance of group differences across many metric dependent variables simultaneously.
• D)assessing the degree of correlation of a group of categorical measures.

---

Definitions:

Callable Bond

A bond that can be redeemed by the issuer prior to its maturity date, usually at a premium to its face value.

Straight Bond

A fixed-income security that pays a fixed interest rate until maturity, at which point the principal is repaid; does not have any special features like convertibility or callability.

Coupon Rate

The annual interest earnings of a bond, represented as a percentage of its stated value.