- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 9. Economic Growth
- Subject 2. Why does Potential Growth Matter to Investors?
CFA Practice Question
The high volatility of equity returns is mainly due to:
II. EPS/GDP.
III. P/E.
I. real GDP growth.
II. EPS/GDP.
III. P/E.
Correct Answer: II and III
These two factors contribute much more to the volatility of the market than to its return.
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