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Convergent Validity and Discriminant Validity Are Both Components of Construct

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Convergent validity and discriminant validity are both components of construct validity. What makes convergent and discriminant validity components of construct validity? What distinguishes the difference between convergent and discriminant validity?


Definitions:

Rate of Return

The gain or loss on an investment over a specific period, expressed as a percentage of the investment's initial cost.

Interest Rate

The fee, shown as a percentage of the principal, that a lender requires from a borrower for the utilization of assets.

Purchase

The act of acquiring goods or services in exchange for money, constituting a financial transaction.

Compounded Annually

Refers to the process of earning interest on both the initial principal and the accumulated interest from previous periods on a yearly basis.

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