Shown Below Is a Correlation Table Showing Correlation Coefficients Between

question 47

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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