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Basic Question 1 of 2
Index fund vendors frequently use the ______ to calculate the average P/E multiple.
B. harmonic mean.
C. weighted mean.
A. arithmetic mean.
B. harmonic mean.
C. weighted mean.
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I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
explain the use of the arithmetic mean, the harmonic mean, the weighted harmonic mean, and the median to describe the central tendency of a group of multiples;
evaluate whether a stock is overvalued, fairly valued, or undervalued based on comparisons of multiples.
CFA® 2025 Level II Curriculum, Volume 4, Module 23.