- CFA Exams
- CFA Level I Exam
- Topic 9. Portfolio Management
- Learning Module 40. Using Multifactor Models
- Subject 2. Factors and Types of Multifactor Models
CFA Practice Question
In the macroeconomic 2-factor model discussed in the reading, the risk premium for the inflation factor and the GDP growth factor are typically ______, respectively.
B. negative and positive
C. positive and positive
A. positive and negative
B. negative and positive
C. positive and positive
Correct Answer: B
User Contributed Comments 5
| User | Comment |
|---|---|
| lingkai | why is risk premium for GDP growth factor negative ? |
| uvp5003 | better economic performance -> investor doesn't require as much compensation for taking on risk related to economic growth |
| sam059687 | Risk premium for inflation is negative and risk premium for gdp growth is positive |
| jimmyvo | @lingkai: The CFAI reading states: The risk premium for GDP growth factor is typically positive and risk premium for inflation is typically negative. |
| mtsimone | The answer is 'B.' See reading. |