INTEREST RATES ARE POSITIVELY RELATED TO EXPECTED VOLATILITY IN GDP GROWTH DUE TO HIGHER RISK PREMIUMS WHEN VOLATILITY IS HIGH

3. - CFA 2018 LEVEL 2 PORTFORLIO QUESTION BANK R50 ECONOMICS AND INVESTMENT MARKETS Q BANK
CFA 2018 LEVEL 2 PORTFORLIO QUESTION BANK R50 ECONOMICS AND INVESTMENT MARKETS Q BANK

3. C is correct. Interest rates are positively related to expected volatility in GDP growth due to

higher risk premiums when volatility is high. Section 3.2. LO.c.