When Alternative Measures of the Same Construct Correlate or Converge

question 35

Multiple Choice

When alternative measures of the same construct correlate or converge with a target measure,the target measure is most likely to have high:

• A)face validity.
• B)discriminant validity.
• C)predictive validity.
• D)construct validity.

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Definitions:

Tax Rate

The percentage at which an individual or corporation is taxed by the government.

Preference Shares

A type of stock that provides holders with priority over common stockholders in the distribution of dividends and assets upon liquidation.

Fair Value

The sum likely to be fetched for selling an asset or the expense incurred to pass on a liability, within a structured deal among participants in the market at the time of assessment.