Describe the Difference Between an Observational Study and an Experimental

question 78

Essay

Describe the difference between an observational study and an experimental study.

---

Definitions:

Expected Return

The weighted average of all possible returns from an investment, with each outcome's weight being its probability of occurrence.

Portfolio Beta

A measure of the volatility of a portfolio in comparison to the market as a whole.

Risk-Free Asset

An investment with a guaranteed return and no risk of financial loss, typically represented by government bonds.

Expected Return

The average return on an investment calculated by multiplying each possible outcome by its probability and then summing all these values.