2023 CFA Level II Exam: Topic 9. Portfolio Management - Learning Module 44. Economics and Investment Markets

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	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;
	explain the relationship between the long-term growth rate of the economy, the volatility of the growth rate, and the average level of real short-term interest rates;
	explain how the phase of the business cycle affects policy and short-term interest rates, the slope of the term structure of interest rates, and the relative performance of bonds of differing maturities; describe the factors that affect yield spreads between non-inflation-adjusted and inflation-indexed bonds;
	explain how the phase of the business cycle affects credit spreads and the performance of credit-sensitive fixed-income instruments; explain how the characteristics of the markets for a company's products affect the company's credit quality;
	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;
	describe the economic factors affecting investment in commercial real estate.

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