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Sunday 22 February 2015

In its strongest form the Fed model states that bond and stock market are in equilibrium.

http://en.wikipedia.org/wiki/Fed_model

In its strongest form the Fed model states that bond and stock market are in equilibrium, and fairly valued, when the one-year forward-looking earnings yield equals the 10-year Treasury note yield (Y_{\text{10}}) :
\frac{E}{P}=Y_{\text{10}}

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