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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 happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach
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.