An analyst observes the following historic asset class geometric returns: 1. The real rate of return for

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An analyst observes the following historic asset class geometric returns:

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1. The real rate of return for equities is closest to:

A. 5.4 percent.

B. 5.8 percent.

C. 5.9 percent.

2. The real rate of return for corporate bonds is closest to:

A. 4.3 percent.

B. 4.4 percent.

C. 4.5 percent.

3. The risk premium for equities is closest to:

A. 5.4 percent.

B. 5.5 percent.

C. 5.6 percent.

4. The risk premium for corporate bonds is closest to:

A. 3.5 percent.

B. 3.9 percent.

C. 4.0 percent.

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2024 CFA Program Curriculum Level I Volume 1

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Authors: CFA Institute

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Question Posted: Feb 01, 2024 08:30 AM

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An analyst observes the following historic asset class geometric returns: 1. The real rate of return for

Question:

Exhibit 17: Asset Class Geometric Return Asset Class Equities Corporate Bonds Treasury bills Inflation Geometric Return (%) 8.0 6.5 2.5 2.1

Step by Step Answer:

1 B is correct The real rate of return for equities is calculated as follows 1 0...View the full answer

2024 CFA Program Curriculum Level I Volume 1

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