A growth stock portfolio and a value portfolio might be characterized:
A)each by their P/E relative to the index P/E; high P/E for growth and lower for value.
B)as earning a high rate of return for a growth security and a low rate of return for value security irrespective of risk.
C)low unsystematic risk and high systematic risk respectively.
D)moderate systematic risk and zero systematic risk respectively.
E)None of the above.

Question

Quizplus · Accepted Answer

The characteristic that best differentiates between a growth portfolio and a value portfolio is their P/E ratio relative to the index P/E ratio. Typically, growth stocks have high P/E ratios, while value stocks have lower P/E ratios.

A Growth Stock Portfolio and a Value Portfolio Might Be