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Why Is It Important to Make Sure That Different Participant

question 128

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Why is it important to make sure that different participant groups are roughly equivalent in terms of personal characteristics (e.g. ,age,gender) before any independent variable is introduced?

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Definitions:

Alpha

A measure of the active return on an investment, indicating how much a portfolio has outperformed or underperformed relative to a benchmark index.

Beta

An indicator of an investment's relative risk compared to the market, highlighting its sensitivity to market movements.

Systematic Risk

The risk of a portfolio associated with market movements that cannot be eliminated through diversification.

Expected Return

This is the anticipated value or profit that an investment will generate over a certain period, factoring in the probabilities of various outcomes.

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