An analyst is preparing a presentation on “Interpreting PE ratios” and has the following data:
Portfolio %
Stock PE
Stock AAA
60%
10
Stock BBB
40%
15
Which of the following is the most appropriate measure for calculating the portfolio P/E? A. Geometric mean of the P/E’s. B. Weighted harmonic mean of the P/E’s. C. Arithmetic average of the P/E’s.
