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Basic Question 2 of 2

When averaging P/E multiples of a group of stocks, the harmonic mean is sometime used to reduce the impact of

A. large outliers only.
B. small outliers only.
C. both large and small outliers.
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User Contributed Comments 4

User Comment
daverco Outliners? Interesting.
alejandroc Never heard it before.
ABYCAPRI Perhaps Outliers!?
thebkr777 It was after all only $100
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I was very pleased with your notes and question bank. I especially like the mock exams because it helped to pull everything together.
Martin Rockenfeldt

Martin Rockenfeldt

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.