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14.1 Pharmaceutical Industry. An equities analyst is studying the pharmaceutical in- dustry and would like your help in exploring and understanding the financial data collected

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14.1 Pharmaceutical Industry. An equities analyst is studying the pharmaceutical in- dustry and would like your help in exploring and understanding the financial data collected by her firm. Her main objective is to understand the structure of the pha- maceutical industry using some basic financial measures. Financial data gathered on 21 firns in the pharmaceutical industry are available in the file Pharmaceuticals.jmp. For each firm the following variables are 1. Market capitalization (i billions of dollars) 2. Beta 3. Price/earnings ratio 4. Return on equity 5. Return on assets 6. Asset turnover 7. Leverage 8. Estimated revenue growth 9. Net profit margin 10. Median recommendation (across major brokerages) 11. Location of firm's headquarters 12. Stock exchange on which the firm is listed Use cluster analysis to explore and analyze the given dataset as follows: a. Use only the quantitative variables to cluster the 21 firms. Justify the various choices made in conducting the cluster analysis, such as the specific clustering b. Interpret the clusters with respect to the quantitative variables that were used in c. Is there a pattern in the clusters with respect to the qualitative variables (those not d. Provide an appropriate name for each cluster (based on variables in the dataset). algorithm/s used, and the number of clusters formed. forming the clusters used in forming the clusters)? How do your results help the equities analyst achieve her objective? e. (329)

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