Which of the Following Is a Way to Interpret Factors

question 21

Multiple Choice

Which of the following is a way to interpret factors?

• A)based on the variables that load high on a factor
• B)by plotting the variables using the factor loadings as coordinates
• C)both A and B
• D)none of the above

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Definitions:

Direct Financing Lease

A type of lease agreement where the lessor effectively finances the leased asset for the lessee, recognizing interest income over the lease term.

Interest Expense

The cost incurred by an entity for borrowed funds, reflected as a financial charge in the income statement over the period of borrowing.

Interest Revenue

Income earned on investments like savings accounts, certificates of deposit, and bonds, typically presented within non-operating income on the income statement.

Current Ratio

A measure of liquidity calculated by dividing a company's current assets by its current liabilities, indicating how well it can cover its short-term obligations.