THE MULTIFACTOR MODEL DESCRIBED BY KRAMER IS A FUNDAMENTAL FACTOR MODEL

21. B is correct. The multifactor model described by Kramer is a fundamental factor model. In

fundamental factor models, the factors are attributes of stocks or companies. Fundamental

factors that have been used are market capitalization, the price- to-earnings ratio, book-value-

to-price ratio and financial leverage. Section 4.1. LO.d.