If an Instrument Measures Consistently but Does Not Measure What

question 3

Multiple Choice

If an instrument measures consistently but does not measure what it was designed to measure, the instrument is:

• A)valid but not reliable.
• B)reliable but not valid.
• C)standardized but not reliable.
• D)reliable but not normative.

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Definitions:

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or investment.

Tax Rate

The percentage at which an individual or corporation is taxed on their income or profits.

Market Value

The existing market price for buying or selling an asset or service.

Accounting Profit

Net income as reported on the financial statements, which includes revenue minus expenses, excluding the cost of capital.