The Fama-French Three Factor Model Includes the Following Factors

question 45

Multiple Choice

The Fama-French three factor model includes the following factors:

• A)beta, expected return on the market, risk free rate of interest, a size factor, and a value factor.
• B)the market risk premium, a volume factor, and a size factor.
• C)beta, expected return on the market, risk free rate of interest, a volume factor, and a value factor.
• D)the yield on corporate bonds, a size factor, and a market factor.
• E)None of the above.

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Definitions:

Tangible

Refers to physical items or properties that can be seen and touched.

Assessed

Evaluated or estimated the value, quality, or extent of something.

Groupthink

A psychological phenomenon that occurs within a group of people when the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Assumptions

A considered belief or supposition made before having full knowledge, used as a basis for decision-making in various contexts.