In the Schweser notes (pg. 420) the answer for Question 1 states that the Earnings growth is simply the given historical Nominal Earnings Growth rather than the expected growth rate + the expected LT inflation rate. Can anyone explain why that is?
something wrong about the page #?
there is no page 420 in the Schweser book 2…
I should have said Class Workbook. The Exhibit is on 420 (slide 85) and the answer is on 422 (slide 89)
question states … earnings growth as it applies to “Nominal Historical Return”…
Ugh, Got it. Thank you for pointing that out. I jumped passed an important detail. I guess better to do that now than in June.