n NISM Certifications
XV NISM Series XV
Medium

If a stock has a higher PE ratio than its peers, it is considered _______.

Practice question from NISM XV Mock Test 1 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Cheap

  2. Expensive

    Correct answer

  3. C

    Highly volatile

  4. D

    Low Beta

Why this is the answer

A higher P/E ratio than industry peers suggests the stock is priced higher relative to earnings, indicating it may be expensive.

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