Which of the Following Correctly Identifies the Factors Included in the Fama-French

question 41

Multiple Choice

Which of the following correctly identifies the factors included in the Fama-French three-factor model?

• A)standard deviation, beta, and company size
• B)the risk-free rate, beta, and the market risk premium
• C)company size, company industry, and beta
• D)price-earnings ratios, beta, and book-to-market ratios
• E)beta, company size, and book-to-market ratios

---

Definitions:

Industry Exit

The process by which businesses leave a particular market or cease operations, often due to unprofitability or strategic realignment.

Herfindahl Index

A measure of market concentration and competition among firms within an industry, calculated by summing the squares of individual firms' market shares.

Four-Firm Concentration Ratio

A measure of market structure that indicates the combined market share of the four largest firms in an industry, used to assess the level of competition.

Market Power

The ability of a firm or group of firms to manipulate prices or output in a market.