Outline what the fama-french three factor model

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Your friend Danni is working in the CFO’s office for MacroHard Inc. Danni’s boss uses the CAPM to estimate the firm’s cost of capital, but Danni remembers from FINA 4210 the Fama-Fench 3 factor model.

a. Outline what the Fama-French 3 factor model is.

b. Why might some people think that the Fama-French 3 factor model is superior to the CAPM?

Reference no: EM131347695

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