its not often i come across a question with something I have flat out never heard of. In working Q-Bank, i came across this: Which of the following statements concerning the choice of an equity index benchmark is least accurate? A) Price-to-earnings (P/E) ratios differ significantly across firms of various size. B) For large-cap stocks, the mean P/E should be used as a benchmark. C) The Yardeni model utilizes historical bond yields. Your answer: C was correct! The Yardeni model relates the current earnings yield on the market to both the current yield on A-rated corporate bonds and the consensus 5-year earnings growth rate. What the H-E -Double Hockey Stick is a Yardeni Model? Can you reference the location in the text of Schweser notes? Preferably the latter…
See reading 42, example 14 I honestly couldn’t tell you anything about it, but it’s there!
its not even in an LOS…What the heck?
see CFAI text, its a complement to the Fed model which posits that if the YTM > equity returns, its pointless to invest in equities, the Yardini model incorporates a 5yr growth rate to account for the forward looking horizon. **See return concepts in equities
The Yardeni model relates the current earnings yield on the market to both the current yield on A-rated corporate bonds and the consensus 5-year earnings growth rate, which is absent in the Fed model. Current corporate bond yields are inversely related to justified P/Es, and growth rates are positively related to justified P/Es.
Although I might have read it I also had no clue what you were asking. http://www.answers.com/topic/fed-model-1