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Basic Question 0 of 19
The P/E ratios of most U.S. companies fall into which of the following categories?
B. 10-20
C. 20-30
D. 30-40
E. 40-50
A. 0-10
B. 10-20
C. 20-30
D. 30-40
E. 40-50
User Contributed Comments 14
| User | Comment |
|---|---|
| DannyZhou | How would I know this? Wild guess? Or is it supposed to be common knowledge? |
| raymondg | Its common knowledge |
| DS12 | It is mentioned in the book. |
| acemaj | Both. |
| johntan1979 | Don't be ignorant. You want to be a CFA, so by right you should know these things! |
| gill15 | It's a pretty valid question. If I'm writing this exam I would want to know where to get this type of information so I could get it right. And Yeah its in the text] |
| kritan | johntan; and you should know you that one never IS a CFA, but a CFA charterholder... |
| farhan92 | B or C make the most sense (without reading the book) |
| Teeto | One can think in terms of required return on equity. 5%-10% (or P/E 10-20) is the most reasonable one. |
| houstcarr | question was actually referring to US companies in general, which do not trade in that range on average. but if referring to the large caps, then yes. take a look at pink sheets |
| Inaganti6 | Lol John Tan you need to brush up on VII of ethics |
| Logaritmus | Nowadays 20-30 is a P/E ratio for most US Stocks (thanks to negative real interest rates). On the other hand, if interest rates are higher you'll most likely have lower P/E ratio i.e. in Emerging Markets (Turkey, Russia) most companies now have P/E < 10. |
| sshetty2 | AN is trying to say that we should be reading the textbook and not relying solely on their study notes; which is something i have not been doing ffs. |
| pigletin | you should know this fact. but it will never be tested in cfa exam |
I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach
Learning Outcome Statements
describe how equity forwards and futures are priced, and calculate and interpret their no-arbitrage value;
CFA® 2025 Level II Curriculum, Volume 5, Module 31.