A Test That Measures or Predicts What It Is Supposed

question 127

Multiple Choice

A test that measures or predicts what it is supposed to is said to have a high degree of

• A) validity.
• B) standardization.
• C) reliability.
• D) the g factor.

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Definitions:

Fisher Effect

The relationship between nominal returns, real returns, and inflation.

Nominal Rates

Interest rates or rates of return that have not been adjusted for inflation, representing the face value of financial products.

Real Rates

Interest rates or rates of return that have been adjusted for inflation.

Gordon Growth Model

The Gordon Growth Model is a method to determine the intrinsic value of a stock based on a future series of dividends that grow at a constant rate.