Which of the Following Is a Measure of the Percentage

question 79

Multiple Choice

Which of the following is a measure of the percentage of a variable's variance that is explained by the factors in factor analysis?

• A) R²
• B) variance inflation factor
• C) partial correlation
• D) communality

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Definitions:

Portfolio

A compilation of investment vehicles including equities, fixed income securities, natural resources, currency, and cash equivalents, as well as closed-end funds and exchange traded funds (ETFs).

Standard Deviation

A statistical measure that quantifies the dispersion or variability of a set of data points or investment returns from their mean.

Returns

The profit or loss on an investment over a specified period of time, often expressed as a percentage of the investment's initial cost.

Market Risk Premium

The additional return expected by investors for taking on the higher risk of investing in the stock market over risk-free securities.