How Closely a Study Resembles Real-World Scenarios Is an Example

question 3

Multiple Choice

How closely a study resembles real-world scenarios is an example of which type of validity?

• A) External validity
• B) Construct validity
• C) Ecological validity
• D) Internal validity

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Definitions:

Cash Flow Hedge

A cash flow hedge is a type of hedge that is used to manage exposure to variability in cash flows, particularly those related to forecasted transactions that could affect profit or loss.

Option Expense

The cost associated with granting stock options to employees or executives, which companies must expense in their financial statements.

Fair Value Hedge

A hedging strategy aimed at protecting against the risk of changes in the fair value of an asset, liability, or an identified portion of such, that is attributable to a particular risk.

Foreign Exchange Risk

The potential for loss due to fluctuations in currency exchange rates affecting the value of foreign-denominated transactions and investments.