Which term is the regression coefficient of a variable for the linear model describing a latent variable?

• A. Factor score
• B. Factor loading
• C. Factor transformation matrix, ∧
• D. Fisher's exact test

Answer: (B)

In a factor-analytic model, the latent variable is linked to each observed indicator through a linear equation where the slope is the regression coefficient that ties the latent factor to that indicator. This coefficient is known as the factor loading. It quantifies how much of the observed variable is explained by the latent factor and the direction of that relationship. A larger absolute value means the indicator is a stronger reflection of the latent construct. The other terms don’t represent this specific link: factor scores are estimates of the latent variable for each case, the transformation matrix relates to deriving or rotating factors, and Fisher’s exact test is a test for categorical data.