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Basic Question 3 of 6
Which factor could explain a high P/E?
B. Less uncertainty about future inflation
C. A fall in the expectation of future real earnings growth
A. A rise in inflation expectations
B. Less uncertainty about future inflation
C. A fall in the expectation of future real earnings growth
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I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
explain how the phase of the business cycle affects short-term and long-term earnings growth expectations;
explain the relationship between the consumption hedging properties of equity and the equity risk premium;
describe cyclical effects on valuation multiples;
CFA® 2025 Level II Curriculum, Volume 6, Module 37.