Examlex

Solved

You Are Trying to Choose Between Two Stocks,Widget and Gadget

question 25

Multiple Choice

You are trying to choose between two stocks,Widget and Gadget.Widget has a current stock price of $40.00 and earnings per share of $2.00.Gadget has a current stock price of $30.00 and earnings per share of $1.00.Both are in the media industry,and the average P/E ratio for this industry is 12.Use the P/E ratio to determine which stock you anticipate will have higher earnings.


Definitions:

One-way ANOVA

A statistical method for evaluating if there's a notable difference between the averages of three or more separate groups.

F-ratio

A statistic used in ANOVA tests that compares the variance between group means to the variance within groups, indicating if any statistically significant differences exist.

Critical Value

A value on the test statistic scale exceeding which leads to the rejection of the null hypothesis.

One-way ANOVA

A statistical test that compares the means of three or more independent groups to determine if there is a significant difference among them.

Related Questions