When Sara, the Human Resource Manager, Attempts to Determine the Predictive

question 248

Multiple Choice

When Sara, the human resource manager, attempts to determine the predictive value of a selection technique, she is doing

• A) validation.
• B) certification.
• C) training.
• D) internal recruitment.
• E) external recruitment.

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Definitions:

Risk-free Asset

An investment with a guaranteed return and no chance of default, such as government bonds.

Risk Aversion

The preference to avoid risk, where investors require higher returns to compensate for higher risk.

Expected Returns

The average of all possible returns for an investment, weighted by the likelihood of each outcome.

Standard Deviations

A statistical measure indicating the amount of variation or dispersion from the average or expected value, widely used in finance to assess investment risk.