- CFA Exams
- CFA Level I Exam
- Topic 5. Equity Valuation
- Learning Module 23. Market-Based Valuation: Price and Enterprise Value Multiples
- Subject 2. Price to Earnings: Determining Earnings
CFA Practice Question
For companies with rising earnings, the leading P/E will be ______ the trailing P/E.
B. smaller than
C. larger than
A. the same as
B. smaller than
C. larger than
Correct Answer: B
This is because the denominator in the leading P/E calculation will be larger.
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