You Are Considering an Investment That Is Expected to Pay

question 49

Multiple Choice

You are considering an investment that is expected to pay 3 percent in year 1, 5 percent in years 2 and 3 and 7 percent in year 4. If you invest $1,000 today, what will this investment be worth at the end of the fourth year?

• A) $1215.07
• B) $1215.51
• C) $1275.81
• D) $1285.75

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Definitions:

Content Validity

The extent to which a test measures all aspects of the concept or construct it intends to assess.

Construct Validity

The extent to which an assessment accurately measures what it is supposed to measure.

Criterion Validity

The extent to which a measure is related to an outcome. It assesses whether a test reflects a certain set of abilities by correlating test results with a criterion measure.

Face Validity

The extent to which a test appears to measure what it is supposed to measure at face value.