Questions
Factual
- How can you decide whether to use Pearson, Kendall, or Spearman as a method for correlation?
- When would you want to see a small degree of freedom in the correlation results?
- Most of the examples used common default parameters. Explore the same examples with nondefault parameters.
When, how, and why?
- Why do the polychoric functions take so long to process?
- Why are the values chosen in the polychoric responses correlated?
- Explain the threshold values that were calculated.
Challenges
- Is there an easier way to develop the 2 x 2 matrix needed as input to the tetrachoric function?
- How could you account for trends in investment vehicles when analyzing stock market returns versus fixed instruments?