You are working with a large dataset, and you want to reduce its dimensionality using PCA. How would you decide the number of principal components to retain, considering the amount of variance explained?

  • By always retaining all principal components
  • By always selecting the first two components
  • By consulting with domain experts
  • By retaining components explaining at least a predetermined threshold of variance
The number of principal components to retain can be decided based on a predetermined threshold of variance explained. For example, you may choose to keep components that together explain at least 95% of the total variance.
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