What Is Face Validity

question 16

Multiple Choice

What is face validity?

• A) whether the instrument seems on the surface (or "face") to be measuring something relevant.
• B) whether the instrument can generalize a causal relationship across persons and settings
• C) the degree to which a measure correlates with other outcome measures
• D) the "ability to discriminate"

---

Definitions:

Rights Offering

A method by which companies raise capital, allowing current shareholders to purchase additional shares at a discounted price before the general public.

Market Price

The current listed price for buying or selling a service or asset.

Underwriters' Spread

The difference between the price at which underwriters purchase securities from issuers and the price at which these securities are then sold to the public.

Stock Issue

The process by which a company distributes its shares to investors, either through initial public offerings (IPOs) or secondary offerings, to raise capital.