CFA CFA Level 3 Emerging market economies

Emerging market economies

  • This topic has 1 reply, 2 voices, and was last updated Aug-17 by christine.
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    • Johnsoad
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      LOS 17; Discuss risks faced by investors in EM securities…… page 92/93 Schweser book 2.

      The text references two different debt to GDP levels above which become casuse for concern. “Debt levels above 70-80% of GDP have been troublesome for developing countries” 3 paragraphs later, Foreign debt levels greater than 50% of GDP indicate the country may be overlevered.
      Any Insight?

    • christine
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      My take on it is that both don’t necessarily address the same definition. E.g. “Chemical X solutions of 70-80% and above have been used to kill people in the past.” And “Chemical A solutions of more than 50% indicate that this solution can be fatally poisonous.”

      So in the exam you’d have to rely on both statements and see which one is more relevant to the particular question.

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