For this Knowledge Assessment, you perform test item analysis on the MoneyData dataset provided in the Week 2 Learning Resources.

The data file includes a six-item scale to measure financial risk-taking tendencies:

• R1: I’d rather run my own business than work for someone else
• R2: I don’t mind risking large amounts of money if there is a good chance I can come out ahead
• R3: I’m willing to take real chances to get ahead financially
• R4: I get bored unless I’m taking some risks with my career
• R5: Being too conservative with your investments can cause financial problems
• R6: Running a business is something that I think of as interesting and exciting

QUESTION 1

1. Calculate Cronbach’s coefficient alpha estimate of reliability for these six items. Click on ANALYZE>SCALE>RELIABILITYANALYSIS. Move the six items into the “Items” box. Click “Statistics” and under “Descriptives for,” select “Scale” and “Scale if item deleted.” Click on “Continue.” Select “Alpha” for the model. Click on “OK.” The alpha coefficient is   a..45    b..57  c..79   d..84

2 points   

QUESTION 2

1. Review the results you generated to answer the last question. The scale standard deviation is:a.5.02b.4.02c.25.2d.17.1

2 points   

QUESTION 3

1. A scale’s standard error of measurement can be calculated from its standard deviation and reliability. Based on the coefficient alpha and standard deviation that you just calculated, what is this scale’s standard error of measurement? (Hint: see Anastasi, 1985, p. 107).    a.2.28    b.3.28  c.3.56   d.4.56

2 points   

QUESTION 4

1. Jane obtained a score of 20 on the financial risk-taking scale. There is a 99% chance that her true score is between:    a.6.3 – 33.7   b.15.4 – 24.   6c.11.1 – 28.9   d.8.2 – 31.8

2 points   

QUESTION 5

1. Which item would you eliminate in order to improve Cronbach’s coefficient alpha for the scale?  a.R1  b.R3   c.R5  d.R6