Which of the Following Statements Regarding the Price/earnings Ratio (P/E

question 79

Multiple Choice

Which of the following statements regarding the price/earnings ratio (P/E ratio) is false?

• A)The P/E ratio is a measure of a stock's relative price.
• B)P/E ratios should be compared among firms in the same industry.
• C)P/E ratios for most corporations have ranged between 5 and 10.
• D)A relatively low P/E ratio indicates that investors expect sluggish growth or an uncertain future.

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