Professor James Uses a System That Requires a Subject to Press

question 20

Multiple Choice

Professor James uses a system that requires a subject to press a button as soon as they see a light blink. He is measuring their reaction time. Unfortunately, his equipment is not working properly and every reaction time recorded randomly fluctuates by plus or minus 10%. You would conclude that the readings obtained with the equipment are:

• A) not reliable and not valid.
• B) reliable but not valid.
• C) not reliable but valid.
• D) reliable and valid.

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Definitions:

Total Expense Ratio

The total cost of operating a fund, including management fees and administrative expenses, expressed as a percentage of the fund's average assets.

Income Dividend

A payment made by a corporation to its shareholders, usually as a distribution of profits.

Rate of Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment’s cost.

Portfolio Beta

A measure of the volatility of a portfolio compared to the market as a whole, indicating the expected percentage change in a portfolio's value for a 1% change in the market.