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Basic Question 0 of 10
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.
B. negative and positive
C. positive and positive
A. positive and negative
B. negative and positive
C. positive and positive
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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Learning Outcome Statements
describe and compare macroeconomic factor models, fundamental factor models, and statistical factor models;
CFA® 2025 Level II Curriculum, Volume 5, Module 40.