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Basic Question 1 of 4
Which component of the discount rate varies the most among various asset classes?
B. Inflation premium
C. Risk premium
A. Real risk-free interest rate
B. Inflation premium
C. Risk premium
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Learning Outcome Statements
explain the notion that to affect market values, economic factors must affect one or more of the following: (1) default-free interest rates across maturities, (2) the timing and/or magnitude of expected cash flows, and (3) risk premiums;
explain the role of expectations and changes in expectations in market valuation;
CFA® 2025 Level II Curriculum, Volume 6, Module 37.