n NISM Certifications
NSM General NISM
Medium

What does the Price-to-Earnings (PE) ratio measure?

Practice question from A-CWM B1 S4 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    The amount an investor pays for ₹1 of a company's book value

  2. B

    The relationship between a stock's price and its expected growth rate

  3. The amount an investor pays for ₹1 of a company's current earnings

    Correct answer

  4. D

    A company's net asset value relative to its market capitalization

A full explanation for this question is being written. In the meantime, the correct answer is highlighted above.

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