What Are the Three Factors in the Three-Factor Model

question 6

Multiple Choice

What are the three factors in the three-factor model?

• A) Term premium, default premium, and dividend yield
• B) Monetary policy, fiscal policy, and beta
• C) Market risk premium, SMB and HML
• D) P/E, P/B, and P/S

---

Definitions:

Functional

Pertains to the practical or essential aspects of something, often referring to specific roles in a business or organization.

Organizational Structure

The system that outlines how certain activities are directed to achieve the goals of an organization, defining roles, responsibilities, and relationships.

Tasks They Perform

Relates to the specific duties and responsibilities assigned to an individual or team in a work environment.

Wide Span Of Control

A managerial approach where a single manager or leader oversees a large number of subordinates or units, leading to a less hierarchical organizational structure.