A P/E Ratio for a Firm That Is Higher Than

question 51

Multiple Choice

A P/E ratio for a firm that is higher than the industry average may indicate:

• A)the firm's growth prospects are seen as being below its competitors
• B)the share is probably underpriced and so you would give a 'buy' recommendation
• C)the share is probably underpriced so you would give a 'sell' recommendation
• D)the share is relatively expensive
• E)None of these.

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Definitions:

Standard Deviation

A measure of the dispersion or variation in a set of values, indicating how much the values differ from the mean.

Bottling Machine

A mechanical device or production line used for filling bottles with liquids, such as beverages, automatically or semi-automatically.

Normally Distributed

Describes a distribution of data that follows a bell curve, where most occurrences take place near the mean.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, indicating how spread out the values are from the mean.