What does a high factor loading indicate in Factor Analysis?

• A. A weak relationship with the factor
• B. A strong contribution of the variable to the factor
• C. A variable that does not affect group separation
• D. A lack of significance in the analysis

Answer: (B)

A high factor loading indicates a strong contribution of the variable to the factor. In Factor Analysis, factor loadings represent the correlations between the observed variables and the underlying latent factors. A high loading means that the observed variable is closely associated with the factor, suggesting that it explains a significant amount of variance in the data for that factor. This strength of association implies that the variable plays an essential role in defining the factor's structure and thus helps in understanding the underlying dimensions of the dataset. High loadings are crucial for interpreting factors meaningfully, as they indicate which variables are most relevant to each factor.