About Economics for the Level II CFA Exam

This forum contains discussion of Economics for the Level II CFA exam.

  • Economics is covered in Study Session 4
  • Economics has an exam weight of 5-10%

Study Session 4

"This study session begins with fundamental foreign exchange concept and theories of exchange rate determination. As a means to understanding exchange rate risk exposures, discussion centers on theoretical long-term equilibrium values. International parity conditions and the carry trade are described. Both direct (capital controls, foreign exchange intervention) and indirect (monetary, fiscal policy) exchange rate influencers are considered. A discussion of long-term growth and its relationship
to investment returns follows. The three theories of growth (classical, neoclassical, endogenous) are presented. The session concludes with an overview of regulation, including the types of regulation, roles played by regulation, and considerations to use when evaluating the effects of regulation on an industry. "
Source: CFA Institute