___________ Validity Asks Whether a Measure Correlates with Other Closely

question 16

Multiple Choice

___________ validity asks whether a measure correlates with other closely related measures found in the same data set.

• A)Convergent
• B)Nomological
• C)Predictive
• D)Functional

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Definitions:

Return On Investment (ROI)

A measure used to evaluate the efficiency or profitability of an investment, calculated by dividing net profit by the cost of the investment.

Net Operating Income

This refers to the profit realized from a business's operational activities, excluding taxes and interest.

Contribution Margin Ratio

A financial metric that measures the proportion of revenue that exceeds variable costs, indicating how much earnings can contribute towards fixed costs and profit.

Combined Margin

refers to the total margin generated by a product or entity after accounting for various types of costs, merging both gross and net margins to provide an overall profitability measure.