Principal Component Analysis Is

question 20

Multiple Choice

Principal component analysis is

• A) Used to summarize data whilst retaining maximum variance.
• B) Used to summarize data whilst retaining minimum variance.
• C) Derive as few factors as possible.
• D) Derive as many solutions as possible.

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Definitions:

Discount Rate

This is the interest rate used in discounted cash flow (DCF) analysis to present values of future cash flows back to their value today.

Estimate Of Eps

A projection or prediction of a company's earnings per share (EPS) for a specified fiscal period.

Last Four Quarters

A reference to the most recent four consecutive fiscal quarters of a company's financial performance, used in analyzing trends.

Required Return

Referred to as the expected yield that investors aim for when putting money into an investment, considering its risk profile.