The Fama and French Three-Factor Model Uses ___, ___, and ___

question 7

Multiple Choice

The Fama and French three-factor model uses ___, ___, and ___ as factors.

• A) industrial production; term spread; default spread
• B) industrial production; inflation; default spread
• C) firm size; book-to-market ratio; market index
• D) firm size; book-to-market ratio; default spread
• E) None of the options are correct.

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Definitions:

Advertising

A form of marketing communication used to promote or sell a product, service, or idea through various media channels.

Individual Sales

Transactions that target single customers rather than large orders or sales to businesses, focusing on personalized experiences or customization.

Financial Reporting

Financial reporting involves the disclosure of financial results and related information to management and external stakeholders, such as investors or regulators.

Future Cash Flows

The projected cash receipts and payments a business expects over a period in the future, important for investment and valuation purposes.