Fama and French Suggest a Three Factor Model Approach

question 58

Multiple Choice

Fama and French suggest a three factor model approach.Which of the following is not included in their approach?

• A) Excess returns to a broad market index
• B) Return differences between small-cap and large-cap portfolios
• C) Return differences between industry characteristics
• D) Return differences between value and growth stocks
• E) Both c and d

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Definitions:

Heart Attack

A medical condition occurring when the flow of oxygen-rich blood to a section of the heart is blocked, often resulting in damage to the heart muscle.

Incidence

The frequency at which a new event occurs in a specified population over a particular period of time.

Significance Level

The threshold below which a result is considered statistically significant, indicating that observed differences are not likely due to chance alone.

Working People

Refers to individuals who are currently employed or are part of the labor force.