Shown Below Is a Correlation Table Showing Correlation Coefficients Between $\text { Correlations: Stock Price, EPS, PE }$

question 2

Multiple Choice

Shown below is a correlation table showing correlation coefficients between stock price, Earnings per share (EPS) and price/earnings (P/E) ratio for a sample of 19 publicly traded Companies.Which of the following statements is false?
$\text { Correlations: Stock Price, EPS, PE }$$\begin{array} { | l | l | l | } \hline \text { Stock Price } & \text { EPS } & \\\hline \text { EPS } & 0.875 & \\\hline \text { PE } & 0.323 & - 0.111 \\\hline\end{array}$

• A)EPS is the best predictor of stock price.
• B)The strongest correlation is between EPS and stock price.
• C)There is a weak negative association between PE and EPS.
• D)PE is the best predictor of stock price.

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