Faculty Scholarship 1994 - Present

Using Basic Skill Test Scores to Predict Performance in the Basic Finance Course

For several year the College of Business faculty at a public university have observed significant differences among junior-level business students' abilities to solve problems in the basic finance course (Principles of Finance). Using the New Jersey College Basic Skills Placement Test, the quantitative and reading abilities were measured for a sample of 138 junior-year students enrolled in Principles of Finance. The test scores were correlated with the students' grades in Principle of Finance. Then the students' basic skills test scores were obtained when they were entering freshmen were correlated with their grades in Principles of Finance. The results indicate significant correlation between grades in Principles of Finance and the scores obtained in the basic skills test taken during the junior year, but not as entering freshman. This paper describes the testing and results and recommends actions to improve performance in Principles of Finance.