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Validity Is a Test's Ability to Measure What It Has

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Validity is a test's ability to measure what it has been designed to measure.


Definitions:

Index Funds

Index funds are investment funds that replicate the portfolio of a specific index, aiming to achieve similar returns to the index they track.

Credit Risk

The potential for loss due to a borrower's failure to make payments on any type of debt.

Tax Treatment

The specific way tax laws apply to particular transactions or classes of income in a financial context.

Interest Rates

The percentage rate of a loan that is charged as interest to the borrower, routinely represented as an annual percentage of the outstanding loan principal.

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