A Floor Effect on a Test Occurs When the Test

question 32

Multiple Choice

A floor effect on a test occurs when the test

• A) is too easy.
• B) is too difficult.
• C) is restricted at the high end of the score range.
• D) has a negatively skewed score distribution.

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Definitions:

Open Interest

The total number of outstanding derivative contracts, such as futures or options, that have not been settled.

Spread Position

In trading, holding a combination of options positions that offset each other, to capitalize on movements in market prices or volatility.

Maturity

The date on which a financial obligation must be repaid or the final due date on which a bond or other debt instrument comes due and the principal must be paid back.

Futures Contract

A standardized legal agreement to buy or sell something at a predetermined price at a specified time in the future, often used for hedging or speculating on the future price of financial instruments.