Fama and French's research indicate that which of the following factors should be considered to understand the expected return for an asset. I) market capitalization
II) beta
III) book to market ratio
IV) earnings growth
A) I) only
B) I) and II)
C) III) and IV)
D) I), II) and III)
E) II), III) and IV)

Question

Quizplus · Accepted Answer

Fama and French's research indicate that market capitalization, beta, and book to market ratio are the three factors that should be considered to understand the expected return for an asset. Earnings growth is not one of the factors identified by the Fama and French model. Therefore, the best choice is D, which includes market capitalization, beta, and book to market ratio.

Fama and French's Research Indicate That Which of the Following