n NISM Certifications
NSM General NISM
Medium

Which valuation metric is most useful for evaluating a growth fund where the company is expected to scale earnings rapidly?

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

Options

  1. A

    PB ratio, because it captures asset quality

  2. B

    PE ratio compared to category average

  3. C

    Dividend yield, because growth stocks pay high dividends

  4. PEG ratio, because it accounts for the growth rate justifying a high PE

    Correct answer

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

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