Question: Consider the following two statements and identify which model each describes: 1 . This model uses a single risk factor, the variability of the stock

Consider the following two statements and identify which model each describes:
1. This model uses a single risk factor, the variability of the stock with respect to the market portfolio, to explain the required return on a security or portfolio.
a. Capital Asset Pricing Model
b. Fama-French three-factor model
2. This model is incorrect because the size effect it uses does not influence stock returns and the book-to-market value effect either is insignificant or is not a function of risk.
a. Capital Asset Pricing Model
b. Fama-French three-factor model

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