All else equal,the forward-looking price-earnings multiple is ________ related to risk and ________ related to growth.
A)indirectly; directly
B)indirectly; indirectly
C)directly; directly
D)directly; indirectly

Question

Quizplus · Accepted Answer

The forward-looking price-earnings (P/E) multiple is indirectly related to risk because higher risk decreases the P/E ratio, and directly related to growth because higher expected growth increases the P/E ratio.

All Else Equal,the Forward-Looking Price-Earnings Multiple Is ________ Related to Risk