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Basic Question 3 of 8
What is a potential limitation of the forward-looking approach in estimating ERP?
A. Relies on historical data
B. Reflects past market conditions
C. Subject to changes in market expectations
D. Ignores investor sentiment
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I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz
Learning Outcome Statements
compare methods used to estimate the required return on equity;
CFA® 2025 Level II Curriculum, Volume 2, Module 18.