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:

Computer Software

Computer software is a collection of data or computer instructions that tell the computer how to work, covering everything from operating systems to application programs.

Oil Company

An enterprise engaged in the exploration, extraction, refining, and selling of oil and petroleum products.

Seasoned Offerings

The issuance of additional shares by a company whose shares are already publicly traded.