C为什么错？

问题如下：

Blake expresses concern that stocks may be currently overvalued in Country #3 given the country’s 20-year historical equity index P/E of 16.0. Carlisle comments:

• I think the equilibrium P/E in Country #3 has increased because of changes in market conditions.

Which of the following changes in market conditions best supports Carlisle’s comment regarding the equilibrium P/E for Country #3?

选项：

A.

An increase in the equity risk premium

B.

A decrease in uncertainty about future inflation

C.

A decrease in expectation of future real earnings growth

解释：

Stock prices are a function of expected cash flows discounted by inflation expectations, the uncertainty of future inflation, and the equity risk premium, among other factors. Holding all else equal, a decline in the uncertainty of future inflation would result in lower discount rates and higher valuations. This result would support a higher equilibrium P/E, thus justifying Country #3’s current trailing P/E being higher than its historical average.