On a Maximum Performance Test Administered to 100 Students,60 Students

question 27

Multiple Choice

On a maximum performance test administered to 100 students,60 students correctly answer item #4.The item difficulty index equals:

• A)0.40
• B)0.60
• C)40
• D)60

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Definitions:

Du Pont Identity

A formula that decomposes a company's return on equity into three components: profit margin, asset turnover, and financial leverage.

Receivables Turnover

A financial ratio that measures how efficiently a company collects its accounts receivable or the firm’s efficiency in managing credit.

Total Asset Turnover

This is a financial efficiency ratio that measures how well a company uses its assets to generate sales revenue.

Price-Earnings Ratio

A valuation metric indicating the ratio of a company's stock price to its earnings per share, used to evaluate the relative value of shares.