- CFA Exams
- CFA Level I Exam
- Study Session 3. Quantitative Methods (2)
- Reading 7. Machine Learning
- Subject 4. Unsupervised Machine Learning Algorithms
CFA Practice Question
The main dimension reduction algorithm discussed in the reading is:
A. Penalized regression
B. Support vector machine
C. Principal components analysis
Explanation: Principal components analysis is an unsupervised ML algorithm that reduces highly correlated features into fewer uncorrelated composite variables by transforming the feature covariance matrix. Note that penalized regression reduces number of features but not dimensions.
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