After Two Consecutive Years of 10% Losses, What Rate of Return

question 252

Short Answer

After two consecutive years of 10% losses, what rate of return in the third year will produce a cumulative loss of 30%?

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Definitions:

Concurrent Validity

Concurrent validity is the extent to which test scores or measurements are correlated with other measures or outcomes that are theoretically related and taken at the same time.

Predictive Validity

How well a result from a test or scale forecasts subsequent performance in a connected area.

Face Validity

The degree to which a test or measure appears effectively to assess what it is supposed to assess, based on casual inspection.

Content Validity

An indicator of construct validity of a measure in which the content of the measure is compared to the universe of content that defines the construct.