Validity Is Whether an Instrument Measures What It Is Supposed

question 64

Multiple Choice

Validity is whether an instrument measures what it is supposed to measure; reliability is whether an instrument gets consistent results across administrations. If spouses fill out a self-report measure of stress from their spouse's point of view, and the spouses' scores match closely, we can say that the self-report inventory is​

• A) ​valid.
• B) ​reliable.
• C) ​both valid and reliable.
• D) ​neither reliable nor valid.

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Definitions:

Financial Characteristics

Refers to attributes that describe the financial health, performance, and structure of a company, such as revenue, profitability, debt levels, and liquidity ratios.

Firm's Beta

A measurement of a company's stock market risk compared to the market as a whole; it quantifies the volatility or systemic risk of a firm's shares.

Industry Group

A classification of companies that conduct business activities in the same sector or segment of the economy.

Index Model

A statistical model used to predict the returns of assets based on the returns of a benchmark market index and the assets' sensitivities to that index.