Shown below is a correlation table showing correlation coefficients between stock price, earnings per share (EPS) and price/earnings (P/E) ratio for a sample of 19 publicly traded companies.Which of the following statements is false?
Correlations: Stock Price, EPS, PE
A) EPS is the best predictor of stock price.
B) The strongest correlation is between EPS and stock price.
C) There is a weak negative association between PE and EPS.
D) PE is the best predictor of stock price.
E) The weakest correlation is between PE and EPS.
Correct Answer:
Verified
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