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Commerce · Q740

Financial Management

Graduate and Post Graduate · Commerce · question 740

Q740

First factor in Fama French three factor model is

A.
CAPM stock beta
Answer
B.
economic stock beta
C.
CAPM portfolio beta
D.
CAPM realized beta

Answer: Option A

Solution

Answer: Option A
Solution:
First factor in Fama French three factor model is CAPM stock beta. The Capital Asset Pricing Model (CAPM) describes the relationship between systematic risk and expected return for assets, particularly stocks.
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