2 formulas for variance / covariance of market

Var(M) = Var(F1) * (b1)2 + Var(F2) * (b2)2 + [2 * b1 * b2 * Cov(F1,F2)] + Var(ε)

This formula was from CFAI online question bank. I’ve seen this same formula without the Var(ε)

Is there a way to know when this formula should include that last term or not?

If you are given Var(ε), you need to use it as market risk would have been underestimated.