An Index of Utility Can Be Distinguished from Both an Index

question 66

Multiple Choice

An index of utility can be distinguished from both an index of reliability and an index of validity in that an index of utility can tell us something about

• A) how consistently a test measures what it measures in a particular context.
• B) whether a test measures what it purports to measure in a particular context.
• C) the practical value of the information derived from what a test measures.
• D) None of these

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Definitions:

Dividend

A portion of a company's earnings that is paid to shareholders, typically on a quarterly basis.

NPV Projects

Projects evaluated based on Net Present Value, a method to assess the profitability of investments by discounting future cash flows.

Excess Cash

The amount of cash held by a company that exceeds what is needed for day-to-day operations and short-term obligations.

Earnings Per Share

A financial metric that measures the amount of net income earned per share of stock outstanding.