Capital Markets Expectations - Equilibrium

CFA Level III Economics
#1

Does anyoneone get why we use the global market sharpe ratio to calculate the risk premium of fully segmented local market. What has the global sharpe ratio have to do with local market that is fully segmented?

CFA Text pg 45 vol 3

thanks

#2

There’s a note at the bottom of the page that states they’re making the assumption that the local market Sharpe ratio is the same as the global market Sharpe ratio.

#3

thanks!