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Two-Factor Model
(redirected from Two Factor Model)

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Two-factor model
Usually, Fischer Black's zero-beta version of the capital asset pricing model. It may also refer to another type of model whereby expected returns are generated by any two factors.

Two-Factor Model
1. An economic model that states that production is derived from two factors. These factors are the availability of cost of labor and the availability and cost of capital.

2. A form of the capital asset pricing model that does not account for beta. This form of the CAPM was developed by Fischer Black.

3. Any economic model that discusses two factors as predominate or exclusive causes of some event.


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htm The confirmatory solution with the two factor model revealed an adjusted goodness-of-fit index of 0.
Also, in an incomplete market setting, Cairns, Blake, and Dowd (2006) use a two factor model of stochastic mortality to price longevity risk such as the November 2004 European Investment Bank/BNP Paribas/Partner Re longevity bond.
Confirmatory Factor Analysis To further evaluate the relative fit of the two factor models based on the exploratory factor analyses of this study and Shek's (2002b) study, we attempted to fit the two alternative five-factor models to the present data.
 
 
 
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