CFA CFA Level 3 Emerging market economies

Emerging market economies

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    • Avatar of JohnsoadJohnsoad
        • CFA Level 3

        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?

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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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