CFA Practice Question

There are 233 practice questions for this study session.

CFA Practice Question

Which is least likely to be a component of a developing country's equity premium?
A. Sovereign yield spread
B. Annualized standard deviation of the developing country's equity index
C. Annualized standard deviation of the sovereign bond market in terms of the developing country's currency
Explanation: The annualized standard deviation of the sovereign bond market in terms of the developing country's currency is not part of the equity premium calculation.

Country equity premium = sovereign yield spread x (annualized standard deviation of equity index / annualized standard deviation of the sovereign bond market in terms of the developed market currency)

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