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CFA Level 3
Portfolio Management and Wealth Planning

Understanding Leading Economic Indicators

Very Easy Economic Analysis Forecasting Tools

A financial analyst is tasked with forecasting the economic growth of a country. To achieve this, the analyst plans to use various economic indicators. One key tool for forecasting economic activity is the leading economic indicators, which tend to change before the economy as a whole changes.

Which of the following options best describes the purpose of leading economic indicators in forecasting economic activity?

Hint

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