[Verse 1] CAPM was just the start, one factor told the tale Market beta ruled the day, but left some things to fail Stock returns had mysteries that beta couldn't show Time to dig much deeper, there's more we need to know [Chorus] Multi-factor magic, three beats one every time Market Size and Value, remember this sweet rhyme Fama-French discovered what the data had to say Three factors work together to explain returns today [Verse 2] Market factor's still the king, it captures systematic risk When the whole market moves up or down, no stock can resist But small cap stocks behave different from the big ones that we know Size effect was hiding there, waiting just to show [Chorus] Multi-factor magic, three beats one every time Market Size and Value, remember this sweet rhyme Fama-French discovered what the data had to say Three factors work together to explain returns today [Bridge] Book-to-market ratio tells us value's story High book value stocks can shine and share the glory While growth stocks trade at premiums, value finds a way To generate extra returns that CAPM couldn't say [Verse 3] SMB means Small Minus Big, the size factor's true name HML is High Minus Low, value plays the game Three factor model captures what single beta missed Expected returns now make sense, the puzzle pieces fit [Chorus] Multi-factor magic, three beats one every time Market Size and Value, remember this sweet rhyme Fama-French discovered what the data had to say Three factors work together to explain returns today [Outro] Beyond the simple CAPM, we found a better way Market Size and Value factors light the path today
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