In finance, risk factors are the building blocks of investing that help explain systematic returns in the equity market and the possibility of losing money in investments or business adventures. A risk factor is a concept in finance theory such as the capital asset pricing model, arbitrage pricing theory and other theories that use pricing kernels.
In finance, risk factors are the building blocks of investing that help explain systematic returns in the equity market and the possibility of losing money in investments or business adventures. A risk factor is a concept in finance theory such as the capital asset pricing model, arbitrage pricing theory and other theories that use pricing kernels.
Source: Wikipedia "Risk factor (finance)" · CC BY-SA 4.0
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