Shown Below Is a Correlation Table Showing Correlation Coefficients Between

question 3

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?

• 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.
• E)The weakest correlation is between PE and EPS.

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Definitions:

Repudiated

When a party refuses to acknowledge or fulfill their contractual obligations, effectively rejecting the contract.

Enforceability

The capability of a contract or legal agreement to be legally compelled or upheld in a court of law.

Capacity

The legal ability, competency, or power of an individual or entity to enter into binding contracts or perform some act.

Insured

A person or entity covered under an insurance policy, providing protection against loss or damage specified in the policy terms.