CFA Practice Question

There are 155 practice questions for this study session.

CFA Practice Question

You are given 500 stocks and try to group them for portfolio diversification purpoases. Each company has multiple features, such as financial ratios, industry features, market shares, R&D expenditures, etc. Which model/algorithm would be the most appropriate one to use?
A. K-Nearest Neighbor
B. K-means clustering
C. Hierarchical clustering
Explanation: K-means can be used to derive different clusters of stocks.

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