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A fund manager recently made the following statements: Company profits are falling below expectations. Unemployment and inflation are low in many developed countries. Investors are

A fund manager recently made the following statements: Company profits are falling below expectations. Unemployment and inflation are low in many developed countries. Investors are concerned with global trade disputes. Global growth is slowing and interest rate cuts are expected in the near future. Explain how this statement can relate to the characteristics of factor models of asset pricing and explain the main features of one model of this type.

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