Lawrence,
The speedo eletroncs calculate the frequency of the signal from an inductive sensor which is triggered by the rotation of the crownwheel in the back axle, it then drives the speedo needle to an appropriate position.
This sensor is also connected to the ABS system (if fitted) to sense rear wheel rotation and should throw up a fault on the ABS light if it is faulty.
The ideal way to check the sensor would be with a frequency meter or a scope,
you should however see an AC voltage output from the sensor rising with speed on a digital multimeter set to around 10v AC.
Sorry don`t have any precise values but a steadily risng voltage with increasing speed should idicate that the sensor is OK.
Maybe one of the resident Volvo electrics experts on this board will come up with a more precise test.
Colin.