Which Statement Best Explains What Is Meant When a Researcher

question 64

Multiple Choice

Which statement best explains what is meant when a researcher talks about the validity of things being measured?

• A) The measurements have been used successfully in other studies.
• B) The research instrument measures what it is supposed to.
• C) Re-using the measurements repeatedly produces the same results.
• D) Other variables in the research are affecting the measured results.

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Definitions:

Average Excess Returns

The average return on an investment above the benchmark or risk-free rate.

Rational Security Pricing

The concept that the market prices of securities reflect all available information and are valued accordingly in an efficient way.

Constant-growth Dividend-discount Model

A method for valuing a stock by assuming that dividends grow at a constant rate indefinitely, used to estimate the stock's price based on future dividend payments.

Multifactor CAPM

Generalization of the basic CAPM that accounts for extra-market hedging demands.