Anon

260 The Basics of financial economeTrics

FIGUre 12.2 Approximation to the True Data Obtained with Four Principal

Components

Note: Data go from X1 top left to X8 bottom right.

−4 0 5 10 15 20

−3

−2

−1

0

1

(^2) True data
Approximation
−2 0 5 10 15 20
−1.5
−1
−0.5
0
0.5
1
1.5
(^2) True data
Approximation
−3 0 5 10 15 20
−2
−1
0
1
2
(^3) True data
Approximation
−1.5 0 5 10 15 20
−1
−0.5
0
0.5
1
1.5
2
2.5 True data
Approximation
−2 0 5 10 15 20
−1.5
−1
−0.5
0
0.5
1
1.5
2
2.5 True data
Approximation
−2.5 0 5 10 15 20
−2
−1.5
−1
−0.5
0
0.5
1
1.5
(^2) True data
Approximation
−2 0 5 10 15 20
−1.5
−1
−0.5
0
0.5
1
1.5
2
2.5 True data
Approximation
−2 0 5 10 15 20
−1.5
−1
−0.5
0
0.5
1
1.5
2
2.5
(^3) True data
Approximation