Risk-Seeking

Please use the ‘Santa Fe’ file to develop an index for the risk seeking of customers.

First, write down in a Word document your own list of indicator variables from the questionnaire that might be correlated with the latent variable “Risk-Seeking”. Then follow the procedure as discussed (reverse score variables if necessary, standardize them, and sum them up). Call the resulting variable “IndexRisk”, and send me a Word document that includes the list of indicator variables, plus the the mean, standard deviation, skewness and kurtosis of the latent variable “Indexrisk”, plus a chart of the distribution of “Indexrisk”.

Please use the ‘Santa Fe’ file and sum up the variables V14/15/18 from the Santa Fe Database as a principal component “PrincComp”. Send me a Word document that includes the mean, standard deviation, skewness and kurtosis of the latent variable “PrincComp”, plus a chart of the distribution of “PrincComp”. Also note some thoughts on the following question: What could the latent variable be about that is summarized by it?