It Is Thought That Historical Growth Rates Have More Impact

question 39

True/False

It is thought that historical growth rates have more impact on an individual company's P/E ratio than expected future growth rate.

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Definitions:

Negatively Correlated

A relationship between two variables in which one variable increases as the other decreases.

Expected Value

A calculation in statistics that quantifies the average outcome of a random event over a large number of occurrences.

Mean

The average value of a set of numbers, calculated by dividing the sum of all values by the number of values.

Risk Aversion

A preference for safer investments, avoiding risk even at the expense of lower potential returns.