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Levels of Measurement Indicate the Inferences That Can Be Drawn

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Levels of measurement indicate the inferences that can be drawn when comparing one category or value of a variable with another: Do they differ? Is one ranked higher than the other? What is the numerical difference? What is the ratio of the values? Identify the four levels of measurement. Then, for each level describe the inferences that can be made when comparing units (e.g., people) who are in different variable categories.


Definitions:

Rate Of Return

The appreciation or depreciation of an investment's value within a selected period, stated as a percentage of the investment's outset value.

Lottery Winnings

Money or prizes won through a system of random drawing or chance.

Annual Payments

The amounts that need to be paid once every year as part of a financial obligation.

EAR

Effective Annual Rate, a representation of an interest rate that takes into account the compounding of interest, shown as an annual rate.

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