Which of the Following Is True About Predictive Validation

question 3

Multiple Choice

Which of the following is true about predictive validation?

• A) It is the least effective method of measuring validity.
• B) It uses the test scores of all applicants and looks for a relationship between the scores and future performance.
• C) It involves administering a test to people who currently hold a job and comparing their scores to existing measures of job performance.
• D) It is the quickest and easiest method compared to other ways of measuring validity.
• E) It permits an employees' firsthand experience with the job to influence his performance in the test.

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Definitions:

Call Option

An agreement in the realm of finance that permits the purchaser to acquire a stock, bond, commodity, or another asset at a predetermined price during a defined timeframe, without compelling them to do so.

Variance

A statistical measure of the distribution of data points in a data set, indicating how far each data point is from the mean.

Downside Risk

The potential loss in value of an investment, indicating the estimate of the extent to which an asset or security could decrease in value.

Conversion Premium

The extra amount an investor pays to convert a convertible security into a specified number of shares of common stock, above its current market value.