The Fama-French model I) is a useful tool for benchmarking performance against a well-defined set of factors.
II. premia are determined by market irrationality.
III. premia are determined by rational risk factors.
IV. the reason for the premia is unsettled.
V. is not a useful tool for benchmarking performance against a well-defined set of factors.
A)I only
B)V only
C)I and II
D)I and IV
E)II and V

Question

Quizplus · Accepted Answer

The Fama-French model is a useful tool for benchmarking performance against a well-defined set of factors, and the reason for the premia is unsettled.

The Fama-French Model I) Is a Useful Tool for Benchmarking