A high P/E ratio indicates high level of risk.
It indicates low levels of risk.

Question

Quizplus · Accepted Answer

A high P/E ratio indicates that investors are willing to pay more for each dollar of earnings, which suggests that they have confidence in the company's future earnings potential. This may indicate lower risk, as investors are willing to pay a premium for the company's stock. However, it is important to consider other factors, such as the company's financial health and industry trends, in evaluating the level of risk associated with a high P/E ratio.

A High P/E Ratio Indicates High Level of Risk