A Financial Advising Company Has Determined That the Price-To-Earnings Ratios

question 113

Multiple Choice

A financial advising company has determined that the price-to-earnings ratios for 20 randomly selected publicly traded companies range between 0.9 and 2.9. Given that the price-to-earnings ratios are uniformly distributed, what percent of price-to-earnings ratios are between 1.90 and 2.48?

• A) 19%
• B) 20%
• C) 26%
• D) 29%

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Definitions:

Contra Account

An account used in the general ledger to reduce the value of a related account when the two are netted together.