Question: 5.2 Consider the two-indicator two-factor model represented by the following equations: A .1: 0.85Fl + 0.121;: + U4 3 = 034171 + 0.0715; '1' Us

5.2 Consider the two-indicator two-factor model represented by the following equations: A .1: 0.85Fl + 0.121;: + U4 3 = 034171 + 0.0715; '1' Us C "' 0.67.171 + OJSF: + Uc D = 0.21F] + 0.93F; + Up E = 0.05F; + 0.7715; + U; F = 0.08F1 -l- 0.6%: 4' Up. The usual assumptions hold for the above model. Also. assume that the commoa factors F1 and F3 are uncorrelated. (a) What are the pattern loadings of indicators A. C. and E on the factors F1 and F 3? (b) What are the structure loadings of indicators A. C . and E on the factors F. and F 2? (c) Compute the correlations between the foilo'Wing sets of indicators: (i) A, 3; (ii) C. D: (iii) E. F. (d) What percentage of the variance of indicators A, C . and F is not accounted for by the common factors F1 and F3? to) Identify sets of indicators that share more than 90% of the total shared variance with each common factor. Which indicators should therefore be used to interpret each common factor

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