Verifying the Validity of a Measurement Using an Outside Source

question 29

Multiple Choice

Verifying the validity of a measurement using an outside source of information, such as SAT scores or GPA, when examining a measure of academic performance is using:

• A)face validity.
• B)construct validity.
• C)criterion-related validity.
• D)content validity.
• E)correlational validity.

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Definitions:

Market Risk Premium

The additional return expected by an investor for holding a risky market portfolio instead of risk-free assets.

Risk-Free Rate

The hypothetical yield on a risk-free investment, often exemplified by state-issued bonds.

Cost Of Equity

The return that a company must offer investors to compensate for the risk of investing in its shares.