A Correlation Coefficient Is Used in Tool Development to Determine

question 35

Multiple Choice

A correlation coefficient is used in tool development to determine:

• A) equivalence of items.
• B) reliability.
• C) stability.
• D) validity.

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Definitions:

Long

An investment strategy where an investor purchases a security with the expectation that it will increase in value over time.

Futures Contract

An agreement to buy or sell a particular commodity or financial instrument at a predetermined price at a specified time in the future.

Underlying Asset

An asset (such as a stock, bond, commodity, or currency) upon which a derivative instrument, such as an option, is based.

Interest Rate Futures

Financial futures contracts that obligate the buyer to purchase an asset (like Treasury bills) with a fixed interest rate at a future date.