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Four-Year-Old Darlene Is Exploring One Day When She Finds a Bottle

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Four-year-old Darlene is exploring one day when she finds a bottle of vitamins in a cupboard. They look just like the candies she got for Halloween so she eats them all. Darlene's error illustrates Piaget's process of:


Definitions:

Beta

An index for assessing the variation or inherent risk of a security or a portfolio as compared to the aggregate market.

Sharpe Measure

A metric used to evaluate the risk-adjusted return of an investment, calculating the difference between the returns of the investment and the risk-free rate, divided by the standard deviation of the investment’s returns.

Beta

A criterion for quantifying the instability or systematic risk of a security or a portfolio in contrast to the market as a whole.

Treynor Measure

A performance metric for determining how well an investment compensates the investor for taking a risk, adjusted for the risk-free rate.

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