There Is a Single Best Way to Measure Every Psychological

question 39

True/False

There is a single best way to measure every psychological construct.

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Definitions:

Mean/Variance

Framework used in finance to assess portfolios by evaluating their expected returns against their risk, measured by variance or standard deviation.

Sharpe Ratio

A measure that indicates the average return minus the risk-free return, divided by the standard deviation of return on an investment, used to understand the return of an investment compared to its risk.

Treynor Measure

A financial metric used to assess the returns of an investment compared to its risk, specifically accounting for systematic risk with the market as a benchmark.

Jensen Alpha

A performance metric that represents the average return on a portfolio or investment above or below that predicted by the capital asset pricing model (CAPM), based on the market risk.