When a False Negative Rate Is High, Test Makers May

question 58

Multiple Choice

When a false negative rate is high, test makers may

• A)re-norm the test.
• B)add items to the test.
• C)lower the cutoff.
• D)increase reliability.

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Definitions:

P/E Ratios

The Price-to-Earnings Ratio, a valuation metric comparing a company's current share price to its per-share earnings, used to evaluate stock price reasonableness.

Ceteris Paribus

A Latin term meaning "all other things being equal," used in economics to isolate the effect of one variable by holding others constant.

Expected ROE

The anticipated return on equity, predicting future profitability by estimating the rate of return on shareholders' equity.

Multistage DDM

A version of the Dividend Discount Model which assumes dividends grow at different rates in different stages of a company's life.