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Question:

An analyst classifies Mettler, Inc., an operator of retail grocery stores, in the same industry group as Powell Corporation, a manufacturer of industrial machinery. This analyst’s classification system is most likely based on:

A statistical methods.
explanation

This grouping is most likely the result of a cluster analysis and may have arisen by chance. The two firms clearly offer different products and services. An industrial machinery manufacturer is likely to be a cyclical firm, while a grocery retailer is likely to be a non-cyclical firm.

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