Which of these statements is false about factor models 1. The of a stock derived from CAPM and a multifactor model are identical and empirically they will be persitently positive over a long period of time 2. Factor s provide portfolio managers with a useful framework to develop a hedging strategy

3. Factor models are used to manage portfolio risk because they measure a portfolio's exposure to various macroeconomic risks 4. A portfolio manager who is bullish about an unexpected surprise on one factor will increase its exposure to that factor if the regulatory factor loading is high (for example 1.5)