Which of the Following Terms Describes the Extent to Which

question 86

Multiple Choice

Which of the following terms describes the extent to which a test actually measures what it claims to measure?

• A)Reliability
• B)Validity
• C)Correlation coefficient
• D)Internal consistency

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Definitions:

Expected Return

The average of all possible returns from an investment, weighted by their probabilities.

Market

A venue where goods, services, or financial instruments are exchanged between buyers and sellers, either physically or electronically.

Beta

An indicator of a stock's fluctuation compared to the general market, where a beta above 1 signals increased volatility.

Risk-Free Rate

An estimated profit from a risk-free investment, commonly illustrated by government security yields.