The Fama-French Three Factor Model Predicts the Expected Return on a Portfolio

question 2

Multiple Choice

The Fama-French three factor model predicts the expected return on a portfolio increases:

• A) linearly with its factor loading of the size factor.
• B) linearly with its factor loading of the volume.
• C) exponentially with its factor loading of the size factor.
• D) exponentially with its factor loading of the volume factor.
• E) None of these.

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Definitions:

Direct Inguinal

Pertaining to a type of hernia that occurs when tissue protrudes directly through a weak spot in the abdominal muscles near the inguinal canal.

Femoral

Pertaining to the femur or thigh bone, often used in context of femoral arteries, nerves, or fractures.

Yellowish Nodules

Small, yellow-colored lumps on the skin, often indicative of underlying lipid disorders or specific dermatological conditions.

Scrotal

Pertaining to the scrotum, the pouch of skin containing the testicles in male mammals.