Chapter 8: Business Cycles, Market Structures, and Asset Valuation

In this section

• Business Cycle Phases and Investment Implications
  Explore the phases of the business cycle, key macro indicators, and the impact on asset performance. Learn strategies for sector rotation and how policymakers influence economic expansions and recessions.
• Yield Curves, Interest Rate Volatility, and Credit Spreads
  Explore yield curves, interest rate volatility, and credit spreads through practical vignettes and real-world applications for CFA® Level II. Understand shapes of the yield curve, how economic cycles drive them, and how to interpret credit spread changes.
• Equity and Debt Market Valuations Across the Business Cycle
  Explore how corporate earnings, valuation multiples, and bond yields evolve throughout different phases of the business cycle, including practical examples and valuation models that help analysts forecast equity and debt market performance.
• Linking Corporate Credit Quality to Economic Conditions
  Explore how economic cycles and macro factors like GDP growth, interest rates, and inflation influence corporate credit metrics, default risk, and credit spreads.
• Vignette Analysis: Policy Shifts, Sentiment, and Sector Rotation
  Explore how policy changes, investor sentiment, and sector rotation dynamics shape economic outcomes and investment strategies in a vignette-based CFA Level II context.
• Market Structures: Overview
  Explore how market structures—including perfect competition, monopolistic competition, oligopoly, and monopoly—shape business dynamics, influence pricing power, and respond to economic cycles in this comprehensive CFA® Level II overview.
• Market Structures and Asset Valuation
  Explore how different market structures—perfect competition, monopolistic competition, oligopoly, and monopoly—drive firm cash flows, competitive advantages, and valuations, with an emphasis on regulatory shifts and technological disruption.