The following table shows the Price-to-Earnings ratio for a stereo equipment manufacturing company between 1998 and 2002. The annual percentage growth rate of the P/E ratios is also calculated and given below. Calculate the geometric mean growth rate increase or decrease over the period from 1998 to 2002.
A) −.2592
B) −.1395
C) −.1816
D) .8616
E) .7417

Question

The following table shows the Price-to-Earnings ratio for a stereo equipment manufacturing company between 1998 and 2002. The annual percentage growth rate of the P/E ratios is also calculated and given below.  Calculate the geometric mean growth rate increase or decrease over the period from 1998 to 2002.
A) −.2592 
B) −.1395 
C) −.1816 
D) .8616 
E) .7417

Quizplus · Accepted Answer

R_g =− 1 R_g = () − 1 = −.1397

The Following Table Shows the Price-To-Earnings Ratio for a Stereo