For the Last Five Years,the Director of HR for BiscuitMan

question 102

Multiple Choice

For the last five years,the director of HR for BiscuitMan Foods has given all new hires an "interpersonal intelligence" test.Now,the director is asking his assistant to calculate the correlations between each employee's test score and his/her performance appraisals,promotion records and whether they have stayed with the firm or have left.The HR director is conducting a

• A) synthetic validity test.
• B) concurrent validity test.
• C) face-validity test.
• D) predictive validity test.

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Definitions:

Beta

A measure of a stock's volatility in relation to the overall market. A beta greater than 1 indicates a stock is more volatile than the market, while a beta less than 1 suggests it is less volatile.

Risk-Free Rate

The anticipated financial gain from an investment devoid of any risk, frequently indicated by the yields of government bonds.

After-Tax Cost of Debt

The net cost of debt after accounting for the tax deductions available on interest payments.

Coupon

The interest rate on a bond that the issuer promises to pay to the holder until maturity, usually expressed as an annual percentage.