Question

7. What are the products below that makes the most sense for real believers of market...

7. What are the products below that makes the most sense for real believers of market efficiency to offer to their clients in a Fama-French three-factor model world?

A. Only S&P 500

B. Only small stock portfolio

C. Only large stock portfolio

D. Only small or value portfolios

E. Only large or growth portfolio

F. Only risk-free assets

G. Any random portfolio of stocks

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Answer #1

Fama-French three-factor model:

The model suggests that return on Small-cap and Value stock are higher compared to big stock or growth stock.

It will include the only small stock portfolio or only small or value portfolios

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