Continuity between the two terminals. You'll find either an open circuit, (very rare), or around 400 to 800 ohms. Check for resistance from either terminal to the housing. Only an open circuit is acceptable. That will test the integrity of the coil of wire.
To test its ability to magnetically produce a signal, measure the AC voltage while the transmission is moving in gear. Basically you're looking for something vs. Nothing. The voltage will not be accurate and will bounce around. Digital voltmeters are designed to read a 60 hz sine wave on the AC scale. The sensor's signal frequency will not be 60 hz and it's closer to a square wave. The meter's reading will vary depending on what part of the waveform it takes the sample to measure.
The best way to test these sensors is to view live data on a scanner. If it shows the Engine Computer is happy with the signals and there's no related diagnostic fault codes, what more could you want?
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Friday, December 21st, 2012 AT 5:00 PM