CFA Practice Question

There are 136 practice questions for this study session.

CFA Practice Question

If all other factors are equal, which of the following would least likely explain the fall in price of a particular company's shares? The rise in ______.

A. real GDP growth
B. expected cash flows of the company
C. volatility in GDP growth
Correct Answer: B

Both the rise in real GDP growth and volatility in GDP growth will result in a rise in real risk-free rate and thus a fall in share price. The rise in expected cash flows, however, will cause the stock price to rise, not fall.

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