Study on Investor Preference for Financial Instruments
Monica Sehgal
Research Scholar, CMJ University, Shillong, Meghalaya
Dr. D.B. Singh
Research Scholar, CMJ University, Shillong, Meghalaya
Download PDFAbstract
CITC indicates whether the variable actually belongs to the construct or not. Variables showing scores
lower than 0.5 are deleted, unless there is a compelling reason to keep them in the construct. Some items with CITC values over 0.5 can also be removed if the overall reliability of the construct in question
improves as a result of the deletion (obtained by checking the alpha if deleted scores). Reliability of
constructs refers to the accuracy with which the constructs repeatedly measure the same phenomenon
without much variation. The reliability of each construct in question is examined using Cronbach‘s alpha
(Cronbach, 1951). An alpha score larger than 0.7 is generally acceptable as sufficient accuracy for a
construct (Nunnally, 1978). After purifying the constructs one by one, we arrive at the purified scales for
the constructs, each of which is sufficiently reliable.
Unidimensionality is a common trait exhibited by all the indicator variables of any given construct
(McDonald, 1981; and Hattie, 1985). Unidimensionality is best measured by CFA. A combination of CFA
and path analysis is structural equation modeling. This is the best method of measuring the
unidimensionality of any construct.
Keywords: Investor Preference; Financial Instruments; CITC
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