Use the Equation for the Question(s) Below

question 48

Multiple Choice

Use the equation for the question(s) below.
Consider the following factor model:
E[R_s] - r_f = (E[R_Mkt] - r_f) + E[R_SMB] + E[R_HML] + E[RPR1 YR]
-The term measures the sensitivity of the securities' returns to

• A) the overall market.
• B) book-to-market.
• C) size.
• D) momentum.

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