The Fama and French Three-Factor Model Uses ___, ___, and ___

question 41

Multiple Choice

The Fama and French three-factor model uses ___, ___, and ___ as factors.

• A)industrial production; term spread; default spread
• B)industrial production; inflation; default spread
• C)firm size; book-to-market ratio; market index
• D)firm size; book-to-market ratio; default spread
• E)None of the options

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Definitions:

Useful Life

The estimated time period that an asset is expected to be usable by an entity, with reasonable efficiency, for the purpose for which it was acquired.

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity, which typically includes the balance sheet, income statement, and cash flow statement.

Not-for-profit Organizations

Entities that operate for purposes other than generating profit, focusing instead on public or social objectives.

External Reporting

refers to the process of preparing and disclosing financial statements and other information to outside users such as investors, creditors, and regulatory agencies.