What are the three factors in the three-factor model?
A) Term premium, default premium, and dividend yield
B) Monetary policy, fiscal policy, and beta
C) Market risk premium, SMB and HML
D) P/E, P/B, and P/S

Question

Quizplus · Accepted Answer

The three-factor model, developed by Fama and French, includes the market risk premium, SMB (Small Minus Big), and HML (High Minus Low) as its factors.

What Are the Three Factors in the Three-Factor Model