Which of the Following Factors Were Used by Fama

question 52

Multiple Choice

Which of the following factors were used by Fama and French in their multifactor model?

• A) Return on the market index
• B) Excess return of small stocks over large stocks
• C) Excess return of high book-to-market stocks over low book-to-market stocks
• D) All of the factors were included in their model.
• E) None of the factors were included in their model.

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Definitions:

Homiphily

The tendency of individuals to associate and bond with others who share similar interests, values, or backgrounds.

Compatibility

The ability of two or more systems, devices, or components to work together without conflict, enhancing functionality or convenience.

Complexity

The state or quality of being intricate or complicated, often referring to systems or problems that have multiple interconnected parts.

Modernity

A term referring to the cultural, social, and economic characteristics and practices typical of contemporary society, especially in contrast to earlier periods.