The Fama-French Three Factor Model Includes the Following Factors

question 41

Multiple Choice

The Fama-French three factor model includes the following factors:

• A) beta, expected return on the market, risk free rate of interest, a size factor, and a value factor.
• B) the market risk premium, a volume factor, and a size factor.
• C) beta, expected return on the market, risk free rate of interest, a volume factor, and a value factor.
• D) the yield on corporate bonds, a size factor, and a market factor.
• E) None of these.

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Definitions:

Social Mobility

The ability for individuals or families to move up or down the socioeconomic ladder within a society.

Metacontrast Principle

A phenomenon in social identity and group behavior, where contrast between in-group and out-group members is maximized in the perceivers' mind.

Extended Contact Effect

The reduction of prejudice through indirect relationships, wherein knowing a member of an in-group has a friends in an out-group can lead to more positive attitudes towards that out-group.

Ingroup Favouritism

Behaviour that favours one’s own group over other groups.