- CFA Exams
- CFA Exam: Level II 2021
- Study Session 9. Equity Valuation (1)
- Reading 25. Return Concepts
- Subject 4. The required return on equity - other models
CFA Practice Question
In the build-up method, the industry premium of ______ implies that the industry is riskier than the market as a whole.
II. 0.5.
III. 1.2.
I. zero.
II. 0.5.
III. 1.2.
Correct Answer: II and III
An industry premium of zero implies that the industry has the same risk as the market as a whole.
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