M7 Assignment 3: Course Project Task XII

Ala Abutabanjeh

Module 6 Assignment 2: Prospectus Project Task X

Identify six or more variables from your selected variable set that would fit the requirements for factor analysis. Create new variables if you don’t have exactly what you would need to do this type of analysis.

1. The Level of Earning Per Share

2. The Percentage Chang In Earning Per Share

3. Company Revenue

4. Company Cost

5. Share Count

6. The Degree of Financial Leverage

State your research question in a manner compatible with the use of a factor analysis. For instance, you could propose an exploratory analysis or one seeking to confirm a model or theory or assumption about the underlying factors measured in a questionnaire.

The variables are group into factor which can measure the same output. African American experience and salaries can have a scale-efficacy depression scale. The variables African American gender and education is another scale-efficacy

Elaborate on how you would plan your study in order to use factor analysis as your method of analysis. Describe and justify the methods you propose for each of the following (discuss any possible concerns or limitations in the proposed methods):

The level of earning per share increase or decrease depending on 3 kays factor which are revenue, cost and share count.

The percentage change in earning per share affected by the degree of financial leverage.

So, in total there is a correlation between the stock return and all above variables (Factors).

Determining sufficient sample size: Specify considerations for the selected alpha level, desired power, desired effect size, and the validation checks you may plan.

In this study I choose 20 cases for every predictors (variables).

Selecting a sample: How would you ensure representativeness?

By choosing the sample randomly

Performing statistical analyses: Include the method to be used, validation checks, and the use of factor scores.

I will use factor analysis to create a model to explain the correlation between the factors. Outlier will discover the difference and who this came to be. The test will be done to determine the normality with an alpha level 0.95.