3.5 Theoretical question
Prove that the maximum number of factors that can be found, is restricted by the product of
the two lowest number of factors for any model. Use the equations given in Chapters 1 and 2.
Hint
Take Eq. (4) as a staring point. Rearrange to estimate A in a LS sense. Use that the rank of the
problem for solving for A (r1,w1), using estimates of B (r2,w2) and C (r3,w3) limits the number
of orthogonal components that can be estimated.
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