Which Statement Is Not True Concerning the Clustering Solution If

question 49

Multiple Choice

Which statement is not true concerning the clustering solution if the variables are measured in vastly different units?

• A) We must standardize the data by rescaling each variable to have a mean of zero and standard deviation of unity.
• B) Standardization can reduce the differences between groups on variables that may best discriminate groups or clusters.
• C) It is desirable to eliminate outliers.
• D) The clustering solution will not be influenced by the units of measurement.

---

Definitions:

Interest Rates

The percentage of a sum of money charged for its use, often expressed as an annual percentage.

Premium

The amount paid for an insurance policy or an extra charge for an enhanced or optional service over and above the basic.

Market Value

The contemporary selling or buying price of a service or asset in the market.

Maturity Risk

The risk associated with the uncertainty of returns due to changes in interest rates as an investment approaches its maturity date.