The price-to-earnings ratio for firms in a given industry is distributed according to the normal distribution. In this industry, a firm with a standard normal variable value of z = 1
A) has an above average price-to-earnings ratio.
B) has a below average price-to-earnings ratio.
C) has an average price-to-earnings ratio.
D) may have an above average or below average price-to-earnings ratio depending on the value of the mean.

Question

Quizplus · Accepted Answer

This is due to the fact that a normal distribution has a mean of 0.

The Price-To-Earnings Ratio for Firms in a Given Industry Is