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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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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References in periodicals archive ?
The 2 factor model was constructed by including items of affect and loyalty dimensions directly on a single factor and items of contribution and respect dimensions directly on another single factor.
The 2 factor model was constructed by including items of procedural, interpersonal, and informational justice as one dimension and distributive justice as another dimension.