Two-factor model

Definition:

Usually, Fischer Black's zero-beta version of the capital asset pricing model. It may also refer to another type of model whereby expected returns are generated by any two factors.

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Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Presidential election cycle theory

A theory that stock market trends can be predicted and explained by the four-year presidential election cycle.

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