A Vendor of Selection Tests Has Called on the Recruiting

question 71

Multiple Choice

A vendor of selection tests has called on the recruiting manager for Maxster Merchandisers,Inc.The vendor is promoting an honesty test which scores he says are strongly negatively correlated with theft.Maxster has had a long-standing problem of employee theft from warehouses.The recruiting manager asks to see some statistics.The vendor says that a high score on the test has a correlation coefficient of ____ with shoplifting behavior.

• A) -.2
• B) .1
• C) .6
• D) -.8

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Definitions:

Investment

The allocation of resources, usually money, into assets or projects expected to generate future returns or profit.

Profitability Index

A calculation that measures the relative profitability of an investment by dividing the present value of future cash flows by the initial investment cost.

Discount Rate

This rate is applied in discounted cash flow analysis to derive the current value of cash flows expected to be received in the future.

Project

A short-term effort made to develop a distinct product, service, or outcome.