Capital Market Expectations: Framework and Macro Considerations

Free CFA Level III: Private Markets lesson in Asset Allocation. 36 min read, ~5,373 words.

CMEs are the most consequential and most error-prone input to asset allocation. Nine challenges recur: data limitations, survivorship bias, non-stationarity, data mining, anchoring, and four others. GDP decomposition (labor force growth + productivity growth) anchors long-run equity return estimates. The Grinold-Kroner model builds equity returns from yield + earnings growth...

Read the full lesson, free →

Worked examples, audio narration, and practice. No signup to read.

What this lesson covers

Content
Example 1
Example 2
Common Mistakes
Key Takeaways
Exam Shortcuts

Learning objectives

cme part 1

Browse all free CFA L3 Private Markets lessons or jump into free CFA L3 Private Markets practice questions.