factor based approach

Characteristic 1The factors commonly used in the factor-based approach generally have low correlations with the market and with each other.

Characteristic 2The factors commonly used in the factor-based approach are typically different from the fundamental or structural factors used in multifactor models.

Monteo concludes the meeting with Chaterji after sharing his views on the factor-based approach.

Q. Which of the characteristics put forth by Chaterji to describe the factor-based approach is/are correct?

1. Only Characteristic 1
2. Only Characteristic 2
3. Both Characteristic 1 and Characteristic 2

Solution

A is correct

可以解释下characteristic 1 吗？ 不太理解。。。。 谢谢