Using a size factor and value factor in addition to the market factor, in 1993, Eugene Fama and Kenneth French introduced their three-factor model, which explained stock returns better than the traditional one-factor CAPM model. This seminal asset pricing model ushered in an era that has seen many risk factors (such as momentum) introduced in the literature. But not all proposed risk factors hold up under scrutiny, nor do they all come with a clear risk/return explanation.

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