SOA Exam SRM Sample Question 30
Study guide: Exam SRM
Principal component analysis is applied to a large data set with four variables.
Loadings for the first four principal components are estimated.
Determine which of the following statements is/are true with respect the loadings.
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I. The loadings are unique.
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II. For a given principal component, the sum of the squares of the loadings across the four variables is one.
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III. Together, the four principal components explain 100% of the variance.
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A) None
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B) I and II only
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C) I and III only
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D) II and III only
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E) The correct answer is not given by (A), (B), (C), or (D).
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