- CFA Exams
- 2025 Level II
- Topic 9. Portfolio Management
- Learning Module 37. Economics and Investment Markets
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Learning Outcome Statements PDF Download
1. Framework for the Economic Analysis of Financial Markets 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; | |
2. Default-Free Interest Rates and Economic Growth 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; | |
3. The Yield Curve and the Business Cycle 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; | |
4. Credit Premiums and the Business Cycle 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; | |
5. Equities and the Equity Risk Premium 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; | |
6. Commercial Real Estate describe the economic factors affecting investment in commercial real estate. |
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