CFA Practice Question

There are 119 practice questions for this study session.

CFA Practice Question

In the macroeconomic 2-factor model discussed in the reading, the risk premium for the inflation factor and the GDP growth factor are typically ______, respectively.

A. positive and negative
B. negative and positive
C. positive and positive
Correct Answer: B

User Contributed Comments 5

User Comment
lingkai why is risk premium for GDP growth factor negative ?
uvp5003 better economic performance -> investor doesn't require as much compensation for taking on risk related to economic growth
sam059687 Risk premium for inflation is negative and risk premium for gdp growth is positive
jimmyvo @lingkai: The CFAI reading states: The risk premium for GDP growth factor is typically positive and risk premium for inflation is typically negative.
mtsimone The answer is 'B.' See reading.
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