n NISM Certifications
X NISM Series X
Medium

The Price-to-Earnings (P/E) ratio considers which of the following?

Practice question from NISM Series XA- Investment Adviser (Level 1) Mock Test 1 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Enterprise value

  2. B

    Environmental factors

  3. Earnings per share

    Correct answer

  4. D

    Equity share capital

Why this is the answer

The P/E ratio is calculated as the market price per share divided by earnings per share, reflecting valuation relative to profitability.

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