Residual Income Is a Better Measure for Performance Evaluation of an Investment

question 56

Multiple Choice

Residual income is a better measure for performance evaluation of an investment center manager than return on investment (ROI) because: (CMA adapted)

• A)the problems associated with measuring the asset base are eliminated.
• B)desirable investment decisions will not be neglected by high return divisions.
• C)only the gross book value of assets needs to be calculated.
• D)returns do not increase as assets are depreciateD.

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Definitions:

Dependent Variable

In experimental research, it's the variable that is being tested and measured.

MMPI Validity Scales

Measures within the Minnesota Multiphasic Personality Inventory designed to assess the test taker’s approach to the test, such as their truthfulness, consistency, and engagement.

F Scale

A personality test designed to measure authoritarian characteristics of an individual.

Z Scale

A standard score scale in statistics that measures how many standard deviations an element is from the mean of the population.