If the coolant temp. sensor is bad, does that tend to skew the gauge higher than the actual temp, lower than actual, or can't tell?

On my recently acquired 85 300D, the radiator broke. After new radiator, I noticed it running cool (I never noticed the temp before the radiator replacement; this is my wife's daily driver). The thermostat was missing. I installed a t'stat, and now seem to be running on the hot side; 90 or so in town, 105 or so on the freeway, with outside temps in the 70s fahrenheit.

I checked the t'stat before installing, and it works. I believe I have burped the system, so I am wondering if the sensor is bad. Anything else I can easily check?

Thanks.

George