Definition for : Fama-French model
The Fama-French model, as well as other offshoots from APT, tries to explain historical Return by company-specific factors rather than the general macroeconomic factors in APT. This model isolates three factors: Market return, price-to-Book ratio, and the gap in Returns between large caps and small caps.
(See Chapter 19 The required rate of return of the Vernimmen)
To know more about it, look at what we have already written on this subject