anothercfainnyc

BIRR(macroeconomic factor) model is used to get the required return or expected return.
Macroeconomic Factor Model in PM is used for prediction(correct me if I’m wrong), and its E(Ri) can come from a multi-factor model like APT.
But where do those betas(factor sensitivities) in BIRR model come from? From a linear regression like Macroeconomic Factor Model from PM? That’s like a recursive process.