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What Is a Scientific Theory, and How Does This Differ

question 15

Essay

What is a scientific theory, and how does this differ from how we often use the term in a nonscientific context?


Definitions:

Technical Analyst

A professional who evaluates securities or market trends based on historical price and volume data to predict future movements.

Passive Approach

An investment strategy that aims to replicate the performance of a market index or benchmark, minimizing buying and selling actions to reduce costs.

Efficient Market

An economic theory stating that asset prices fully reflect all available information, making it impossible to consistently achieve higher returns than the overall market.

Market Efficiency

The extent to which stock prices reflect all available, relevant information, making it impossible to consistently achieve higher returns without assuming additional risk.

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