The Fama-French Three-Factor Model is an asset pricing model that expands on the Capital Asset Pricing Model (CAPM) by incorporating three factors: market risk, size, and value. It aims to explain the variations in stock returns beyond just market risk, highlighting the importance of small-cap stocks and high book-to-market stocks in generating higher returns.
congrats on reading the definition of Fama-French Three-Factor Model. now let's actually learn it.