The Price to Earnings Ratio, Also Called the P/E Ratio

question 110

Multiple Choice

The price to earnings ratio, also called the P/E ratio of a stock, is a measure of the price of a share relative to the annual net income per share earned by the firm. Suppose the P/Es for a firm's common stock during the past four quarters are 10, 12, 15, and 11, respectively. The standard deviation of the P/E ratio over the four quarters is ________.

• A) 1.87
• B) 2.16
• C) 3.50
• D) 4.67

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Definitions:

Oculomotor

Relating to the third cranial nerve, which controls most of the eye's movements, including constriction of the pupil and maintaining an open eyelid.

Trigeminal

refers to the fifth cranial nerve responsible for sensation in the face and motor functions such as biting and chewing.

Optic

Relating to the eye or vision; often used in terms associated with the visual pathways and structures.

Sympathetic Division

The sympathetic division is a part of the autonomic nervous system that prepares the body for physical activity, increasing heart rate, blood pressure, and energy availability.