Factor Return

Factor Return

The return attributable to a particular common factor. We decompose asset returns into common factor components, based on the asset's exposures to common factors times the factor returns, and a specific return.

Factor Return

The return a factor receives on its investment. A factor is a company that buys the accounts receivable from another company in exchange for a smaller fee, which is paid up front. If and when the factor eventually receives the total amount accounts receivable, it makes a profit.