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.
References in periodicals archive ?
htm The confirmatory solution with the two factor model revealed an adjusted goodness-of-fit index of 0.
The figure shows that the long-term model approximates the two factor model for maturities greater than three years.
1981; Riggs, 1981 Steinberg & Sykes, 1985); a psychological or psychodynamic perspective (Glasser 1976; Perry & Sacks, 1981; Sacks, 1979); a more sociological view which emphasizes the importance of socialization (Ewald & Jiobu, 1985) and a two factor model involving both psychobiologic and cognitive-intellectual phenomeno (Sachs & Pargman, 1979a, 1979b, 1979c, 1979d, 1984).
Not even Mandler, a respected emotion theorist in mainstream academic psychology, has addressed the relative weights and importance of cognition and physiology in his two factor model of emotion.
63) indicated that the two factor model explained a large amount of variance within the data.
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.