Multifactor models of risk and return can be broadly grouped into models that use macroeconomic factors and models that use microeconomic factors.

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Quizplus · Accepted Answer

This statement is true. Multifactor models of risk and return typically use either macroeconomic factors, such as interest rates and inflation rates, or microeconomic factors, such as company-specific financial metrics like earnings and market value. These two groups of models are often referred to as macroeconomic or microeconomic factor models.

Multifactor Models of Risk and Return Can Be Broadly Grouped