Given a text T, and several options, according to the question posed in the text T to choose the most appropriate option from the options as the answer, please directly output the most appropriate option, do not need to output the explanation.

Julie Carlisle is a financial planner at a large wealth management firm. One of her clients, Esteban Blake, just received a sizable inheritance. He invests a portion of the inheritance in an annuity that will immediately increase his income by a substantial amount. He enlists Carlisle's help to invest the remaining amount of the inheritance.Blake informs Carlisle he would like some short-term bonds in his portfolio. Carlisle proposes purchasing a one-year domestic government zero-coupon bond. 1t has a face value of $100 and is currently priced at $96.37. Carlisle estimates the one-year real risk-free rate at 1.15% and expects inflation over the next year to be 2.25%.In an effort to provide Blake with some exposure to international markets, Carlisle proposes three countries to look for investment opportunities. Selected data on the three countries are presented in Exhibit 1.
| Exhibit l.Selected Macroeconomic Data |
| NominalGDPGrowth | InflationRate | Volatility ofReal GDPGrowth | Yield CurveShape | Trailing12-Month EquityIndex P/E |
| Country # 1 | 6.5% | 4.0% | Flat | 16.5 |
| Country # 2 | 5.0% | 2.5% | High | Upward slope | 17.3 |
| Country # 3 | 3.5% | 2.0% | Low | Flat | 18.2 |


In her analysis, Carlisle observes that the spread between the three-year default- free nominal bond and the default-free real zero-coupon bond in Country #3 is 2.0%.Blake expresses concern that stocks may be currently overvalued in Country #3 given the country's 20-year historical equity index P/E of 16.0. Carlisle comments:I think the equilibrium P/E in Country #3 has increased because of changes in market conditions.Carlisle predicts that Country #3 wil1 slip into a recession next quarter. She thinks it will be short-lived, lasting only 12 months or so, and considers the impact of such a recession on the performance of the country’s stocks and bonds.
| Exhibit 2.Three-Year Corporate Bonds from Country # 3 |
| Corporate Bond | Moody's Investors Service Rating | Spread* |
| Bond A | Aaa | 1.4% |
| Bond B | Baa 1 | 3.2% |
| Bond C | B3 | 5.3% |
| *Spread versus three-year sovereign bond |


 
Which of the following changes in market conditions best supports Carlisle's comment regarding the equilibrium P/E for Country #3?
Option A:An increase in the equity risk premium
Option B:A decrease in uncertainty about future inflation
Option C:A decrease in expectation of future real earnings growth

Answer: B