CFA Practice Question

There are 136 practice questions for this study session.

CFA Practice Question

When assessing investment opportunities in equities, investors should ______.
A. assign higher equity risk premiums to value stocks relative to growth stocks.
B. forecast lower volatility in the growth rate of earnings for growth stocks, relative to value stocks.
C. forecast higher growth rates in earnings for growth stocks coming out of a recession relative to value stocks.
Explanation: While coming out of a recession, growth stocks are likely to generate higher earnings growth relative to value stocks.

User Contributed Comments 1

User Comment
janis36 According to Carhart model, answer A is also correct.
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