1)Explain why investors use the P/E ratio as a valuation measure?

2) Explain the difference between trailing 12-month P/E and forward P/E. Compare the two measures of firm value, explaining the benefits and drawbacks of each one?

Robert Shiller of Yale University argues that a better measure is the cyclically-adjusted P/E ratio, or CAPE ratio, which is also known as the Shiller P/E.

a) Explain why this measure should be superior to a trailing 12-month P/E ratio