THE HIGH P/E IN USA COULD BE DUE TO A NUMBER OF FACTORS INCLUDING AN INCREASE IN EXPECTATIONS OF FUTURE REAL EARNINGS GROWTH, FALL IN INTEREST RATES AND FALL IN VOLATILITY IN GDP REAL GROWTH RATE, A FALL (NOT A RISE) IN INFLATION EXPECTATIONS, A FALL IN...

4. B is correct. The high P/E in USA could be due to a number of factors including an increase

in expectations of future real earnings growth, fall in interest rates and fall in volatility in

GDP real growth rate, a fall (not a rise) in inflation expectations, a fall in equity risk

premium etc. Section 6.4. LO.j.