CFA Practice Question

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CFA Practice Question

Stock performance can be rated as 5 (superior), 4 (above average), 3 (average), 2 (below average) or 1 (poor). This is an example of which type of measurement?

A. nominal
B. ordinal
C. interval
Correct Answer: B

This is an example of an ordinal scale. since this data can be ranked or ordered but the difference between the ranks cannot be determined in a meaningful way.

User Contributed Comments 4

User Comment
rainatt why not interval?
cbb1 It is ordinal because the categories are numerical, but not interval since there is no indication that the intervals between the categories are the same. In other words, Superior (5) is better than Above Average (4), but we don't know if the difference between 5 and 4 is the same as the difference between 3 and 2.
alester83 i think of them as catagory, ranks, range, and ratio. it helps keep them straight.
2014 Interval says, difference between two different point is equal: as per 5-4 = 1, 2-1 = 1

difference is same. But in performance u cannot apply this equality
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