The results of studies that have looked at the relationship between PEG ratios and subsequent stock returns
A) Find an inverse relationship, with annual rebalancing.
B) Find no relationship, with monthly or quarterly rebalancing.
C) Find an inverse relationship, with monthly or quarterly rebalancing.
D) Find a direct relationship, with monthly or quarterly rebalancing.
E) Find a direct relationship with annual rebalancing

Question

Quizplus · Accepted Answer

Studies have found an inverse relationship between PEG ratios and subsequent stock returns, but the relationship is only significant with monthly or quarterly rebalancing. Annual rebalancing may not capture the fluctuations in the PEG ratio and stock returns over shorter periods.

The Results of Studies That Have Looked at the Relationship