The Scree Plot, Such as the One Used in Q1

question 10

Multiple Choice

The scree plot, such as the one used in Q1, represents a plot of?

• A) Each factor against its eigenvalue.
• B) The factor loadings of each variable onto each factor.
• C) The correlations between variables.
• D) The regression coefficient of each variable with each factor.

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Definitions:

Earnings Per Share

A financial ratio that indicates the portion of a company's profit allocated to each outstanding share of common stock, serving as an indicator of the company's profitability.

Dividend Yield

A financial ratio that indicates how much a company pays out in dividends each year relative to its stock price.

Price-Earnings Ratio

A valuation metric that compares a company's current share price to its per-share earnings.

Return On Total Assets

A financial ratio that indicates how effectively a company is using its assets to generate profit, measured by dividing net income by total assets.