The Fama-French factor model is rooted in the idea that risk factors, such as fundamental macroeconomic factors, can outperform the market. When such factors or anomalies persist, markets lack perfect efficiency, and investment opportunities exist outside of the market portfolio.

This project estimates the risk model exposures for the Apple stock monthly returns from 1981-2022. Market risk and HML(High minus Low) had positive and negative significant exposures, since Apple is a growth stock and not a value stock. SMB(Small minus Big) and surprisingly momentum had insignificant exposures. R-squared was 0.29 so the model explained 29% of the variations in the stock suggesting there is a fairly big idiosyncratic component.