Which of the Following Is NOT an Input into the Fama-French

question 24

Multiple Choice

Which of the following is NOT an input into the Fama-French three-factor model?

• A)The difference between low book-to-market returns and high book-to-market returns.
• B)The difference between growth stock returns and value stock returns.
• C)The market portfolio returns.
• D)The difference between small-cap returns and large-cap returns.

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Definitions:

Net Present Value

A financial metric indicating the value of a series of cash flows over time in today's dollars.

Capital Budgeting

The process a business undertakes to evaluate potential major investments or expenditures to ensure financial viability and return on investment.

Tax Haven

A country or jurisdiction with very low or no taxes, often used by businesses and wealthy individuals to reduce their tax liability.

International Accounting Standards Board

An independent organization that establishes accounting standards, aiming for global harmonization.