The Fama-French Model I) Is a Useful Tool for Benchmarking

question 21

Multiple Choice

The Fama-French model I) is a useful tool for benchmarking performance against a well-defined set of factors.
II. premia are determined by market irrationality.
III. premia are determined by rational risk factors.
IV. the reason for the premia is unsettled.
V. is not a useful tool for benchmarking performance against a well-defined set of factors.

• A)I only
• B)V only
• C)I and II
• D)I and IV
• E)II and V

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Definitions:

Social Capital

The networks of relationships among people who live and work in a particular society, enabling that society to function effectively.

Tastefully Use

To employ or apply something in a manner that is aesthetically pleasing, respectful, or appropriate for the context.

Basic Income

A socioeconomic policy of providing all citizens with a regular, unconditional sum of money, regardless of employment status or other income.

Large Inequalities

Substantial discrepancies in income, wealth, access to resources, and quality of life among different populations or groups within a society.