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Basic Question 4 of 8

What is a common factor considered in both historical and forward-looking approaches to estimating ERP?

A. Market sentiment
B. Current risk-free rate
C. Expected cash flows
D. Economic conditions

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Edward Liu

Edward Liu

Learning Outcome Statements

explain historical and forward-looking approaches to estimating an equity risk premium;

CFA® 2025 Level II Curriculum, Volume 3, Module 18.