The Price to Earnings Ratio,also Called the P/E Ratio of a Stock

question 58

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 be 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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