Factor portfolio - Definition

Factor portfolio is defined as a well-diversified portfolio constructed to have a beta of 1.0 on one factor and a beta of zero on any other factors. The stocks are selected so that the portfolio as a whole is strongly affected by one factor but is weakly affected by other factors. Portfolio construction is based on historical data.



Terms near "Factor portfolio"

Factor return
Factor's lien
Factoring
Factors of production
Factory gate price
Factory Orders
Facultative reinsurance
FAD multiple
Fail position
Fair market value
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