1.Please explain in your own words one advantage and one disadvantage of using a multi-factor model. 2.Pretend you are creating a new risk factor based on firm age. You decide that younger firms (less than ten years old) are riskier, and older firms (more than ten years old) are less risky. How would you construct your factor? 3.In your jobs or internships, you are likely going to have to select a factor model to use in your own analyses. Does it matter to your personal decision whether these factors make economic sense (i.e., you believe there is an economic reason small firms, for example, are riskier) or is the fact that these factors seem to exist statistically sufficient? (note: I'm looking for an opinion here, but a well-reasoned and thought-out opinion.)