**5. Conclusions**

The generalized men-reverting 4/2 factor model is proposed and studied in this paper. We provide analytical expressions for key characteristic functions and conditions for well-defined changes of measures. We also explore the impact of *b*, i.e., the 3/2 component of the model in the volatility process, and *a*, the commonalities in the absence and presence of stochastic volatility on the common factor. These impacts were measured with respect to implied volatility surfaces and two important risk measures. The results demonstrate that even small values of the 3/2 component (*b*) can lead to a 100% change in the implied volatility surface, as well as up to 28% and 29% increases in the VaR and ES measures, respectively.

**Author Contributions:** All authors contributed equally.

**Funding:** This research received no external funding.

**Conflicts of Interest:** The authors declare no conflict of interest.
