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Third factor in Fama French three factor model is ratio which...

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Financial Management
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Third factor in Fama French three factor model is ratio which is classified as

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Correct Answer: Option B
Third factor in Fama French three factor model is ratio which is classified as market to book ratio. The Fama and French model has three factors: size of firms, book-to-market values and excess return on the market. In other words, the three factors used are SMB (small minus big), HML (high minus low) and the portfolio's return less the risk free rate of return.
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