SOA Exam SRM Sample Question 6
Study guide: Exam SRM
Consider the following statements:
- I. The proportion of variance explained by an additional principal component never decreases as more principal components are added.
- II. The cumulative proportion of variance explained never decreases as more principal components are added.
- III. Using all possible principal components provides the best understanding of the data.
- IV. A scree plot provides a method for determining the number of principal components to use.
Determine which of the statements are correct.
- A) Statements I and II only
- B) Statements I and III only
- C) Statements I and IV only
- D) Statements II and III only
- E) Statements II and IV only
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