CFA Practice Question

CFA Practice Question

If the earnings per share on the S&P 500 index increases by 16% and the earnings multiplier decreases by 9%, the index will experience a change of:
A. 16%
B. 26.44%
C. 5.56%
Explanation: The index value = earnings multiplier * earnings per share. Therefore, the change in index value equals 1.16 * 0.91 -1 = 5.56%

User Contributed Comments 1

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smettias 0.91?
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