Fama–French three-factor model
= Fama–French three-factor model
{wiki=Fama–French_three-factor_model}
The Fama-French three-factor model is an asset pricing model that enhances the Capital Asset Pricing Model (CAPM) by adding two factors to account for the observed anomalies in stock returns that CAPM could not explain. Developed by Eugene Fama and Kenneth French in the early 1990s, the model aims to provide a better insight into the determinants of expected stock returns.