The Validity Coefficient for a College Admissions Test for Predicting

question 59

Multiple Choice

The validity coefficient for a college admissions test for predicting freshman year GPA is .40. The test's reliability is .80. If we apply the correction for unreliability in this situation, the validity coefficient will ___.

• A) decrease
• B) increase
• C) stay the same
• D) become negative

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Definitions:

Profitability Ratio

A class of financial metrics that are used to assess a business's ability to generate earnings relative to its revenue, assets, equity, or other financial metrics.

Solvency Ratio

Financial metrics used to evaluate a company's ability to meet its long-term debt and other obligation by comparing its assets to its liabilities.

Profit Margin

A financial metric that measures the amount of net earnings a company makes as a proportion of its sales.

Return On Common Stockholders' Equity

A measure of the profitability of a corporation in terms of the returns generated on the equity investment of the common shareholders.