问题如下：
5. 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：
B is correct.
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.
考点：P/E ratio
解析：题目问的是哪个因素可以导致P/E变大。其中P是由未来现金流折现求和所得。
A，equity risk premium增加，导致P/E中的P减小。因为equity risk premium使得折现率变大，分母变大，P减小。
B， uncertainty about future inflation减小，折现率变小，分母变小，P变大，所以P/E变大。
C， real earnings growth减小，可以从两个角度考虑：一是real earnings growth减小导致未来现金流减小，分子变小，P变小，所以P/E变小。二是Goldern Growth Model，P=D1/(r-g)，分母变大，P减小，所以 P/E变小。
题目也没说P是discounted expected cash flow
我觉得P就是current market Price呀， 然后选earning 低的就好了呀（ future earning低，也就是leading PE 高 ？）？
