Studies of the Relationship Between P/E Ratios and Stock Returns

question 58

Multiple Choice

Studies of the relationship between P/E ratios and stock returns have found that

• A) Low P/E stocks of large cap stocks outperformed low P/E stocks of small cap stocks.
• B) Low P/E stocks of small cap stocks outperformed high P/E stocks of large cap stocks.
• C) High P/E stocks of large cap stocks outperformed low P/E stocks of small cap stocks.
• D) High P/E stocks of large cap stocks outperformed high P/E stocks of small cap stocks.
• E) none of the above.

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