Fama-Bliss

The Fama-Bliss model is a financial concept that explains how investors estimate the expected returns of different securities, like stocks and bonds, based on their risk. Developed by economists Eugene Fama and Robert Bliss, it suggests that higher-risk investments typically offer the potential for greater returns. The model uses historical data to analyze how bond yields respond to changes in the economy, helping investors understand the link between risk and return. This framework aids in making informed decisions about where to allocate resources in the investment landscape.