Question: What is the multifactor model? An asset pricing model that has more than one beta; this model includes component for our normal beta and additional

What is the multifactor model?

An asset pricing model that has more than one beta; this model includes component for our "normal" beta and additional betas for firm size (small minus big) and firm values (high minus low)

An asset pricing model that has only one beta; why would you need more?!?!

An asset pricing model that includes both systematic (market) risks and nonsystematic (firm) risk

An asset pricing model that only captures systematic (market) risk since that is the only risk that matters

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