CFA Practice Question

There are 119 practice questions for this study session.

CFA Practice Question

Assume that a stock?'s returns are affected by two factors: surprises in inflation and surprises in GDP growth: R = 8% -?? 0.5 Finfl + 1.25FGDP + ε

The expected return on the stock is ______.

A. 8%
B. 8.75%
C. Not enough information. Cannot calculate.
Correct Answer: A

The expected return is the value of the intercept in the equation.

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