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BRIEF CASE 7. 67954 47.95 55229 1829 2 MT 45H 2568 38.99 Price/Earnings and Stock Value The CAPE10 index is based on the Price/Earnings
BRIEF CASE 7. 67954 47.95 55229 1829 2 MT 45H 2568 38.99 Price/Earnings and Stock Value The CAPE10 index is based on the Price/Earnings (P/E) ratios of stocks. We can examine the P/E ratios without applying the smoothing techniques used to find the CAPE10. The file CAPE10 2017 holds the data, giving dates, various eco- nomic variables, CAPE10 values, and P/E values. Examine the P/E values. Split the data into two periods: 1881-1989 and 1990 to the present. Would you judge that a Normal model would be appropriate for those values from the 1880s through the 1980s? Explain (and show the plots you made). Now consider the more recent P/E values in this context. Do you think they have been extreme? What years, if any, appear to be particularly problematic? Explain. U19 +6.04 +3.81 9569 5 58.04 -7.02 -3.72 887.32 +9.03 +3.96 $73.54 +14.28 +2.54 $52.09 -1132 -213 401.76 +9.45 +1.96 215.68 +8.35 +3.32 58.92 +6.29 +1.03 34.18 -135-457 45 12.88 298.07 12595 17895 87 8658 114 1919 98 18.76 15215 2 3.17595 - 86.99 2 58 252 54.32 73 9916531 86 9665 15 84B 8 318 9879 15 58 24 3.76 19 381 32 39 652 0218-13.84-3.45 54 175 63 15:31
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