CORGAN'S THREE-FACTOR MODEL IS A FUNDAMENTAL FACTOR MODEL BECAUSE IT CONSIDERS SUCH FACTORS AS P/CF, CAPITAL INVESTMENT, AND EQUITY RETURNS

26. - CFA 2018 LEVEL 2 PORTFORLIO QUESTION BANK R48 INTRODUCTION TO MULTIFACTOR MODELS Q BANK 26. - CFA 2018 LEVEL 2 PORTFORLIO QUESTION BANK R48 INTRODUCTION TO MULTIFACTOR MODELS Q BANK
CFA 2018 LEVEL 2 PORTFORLIO QUESTION BANK R48 INTRODUCTION TO MULTIFACTOR MODELS Q BANK

26. C is correct. Corgan's three-factor model is a fundamental factor model because it considers

such factors as P/CF, capital investment, and equity returns. There is no reference to

macroeconomic factors (e.g., interest rates, inflation risk, business cycle risk, or credit

spreads) and statistical factors (e.g., historical covariances). Section 4.1. LO.d.