Please Define the Following Key Terms

question 52

Short Answer

Please define the following key terms. Show Who? What? Where? When? Why Important?
-empiricism

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Definitions:

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.

Selection Bias

A distortion of statistical analysis resulting from the method of collecting samples, leading to data that is not representative of the population being studied.