CFA Practice Question

There are 253 practice questions for this study session.

CFA Practice Question

The percentage change in stock market value is the sum of the percentage change in GDP, the share of earnings in GDP and the P/E ratio. In the long run, which factor must dominate? The percentage change in:

A. GDP itself.
B. the share of earnings in GDP.
C. the P/E ratio.
Correct Answer: A

The other two factors cannot rise or decline forever.

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