Answer: future company-specific returns.

The market model utilizes historical security and market returns to estimate the intercept (α) and slope coefficient (β). These estimates are then applied to predict company-specific returns for a future period. This distinguishes it from macroeconomic factor models, which rely on economic factors like growth to forecast returns. The market model is a type of return-generating model, emphasizing its role in predicting security-specific performance rather than broader market or economic trends.

Author: LeetQuiz Editorial Team