The P/E Ratio Is a Multiple of Earnings That Investors

question 58

Multiple Choice

The P/E ratio is a multiple of earnings that investors pay for a stock. The P/E is __________ related to growth, __________ related to the discount rate, and __________ related to the stock's risk.

• A) positively; positively; negatively.
• B) negatively; positively; positively.
• C) positively; negatively; negatively.
• D) negatively; negatively; positively.

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