According to the Authors of the Text,the Minimum Size for Acceptable

question 7

Multiple Choice

According to the authors of the text,the minimum size for acceptable validity coefficients is:

• A)0.60.
• B)0.70.
• C)0.80.
• D)0.90.
• E)indeterminate - it depends on many factors.

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Definitions:

Market Risk Premium

The additional return expected by investors for holding a risky market portfolio instead of risk-free securities.

Unique Risk

The risk specific to an individual asset, such as a stock, which can be mitigated through diversification.

Individual Security

A financial instrument (such as a stock or bond) representing an individual's ownership or creditor relationship with a corporation or governmental entity.

Market Risk Premium

The excess return that investors require for choosing a risky investment over a risk-free investment.