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In stock market trading, the price-earnings ratio, Known as P/E ratio, is the ratio or a company's share price to the company's earnings per share.
In stock market trading, the price-earnings ratio, Known as P/E ratio, is the ratio or a company's share price to the company's earnings per share. The ratio is used ror valuing companies and to rind out whether they are overvalued or undervalued. For example, stocks with a low P/E ratio indicate bargain stocks. The Wolf of Wall Street examined 23 stocks from the leading companies in the United States, and found the mean and standard deviation to be 27.7 and 9.5, respectively. Construct a 95% condence interval for the mean P/E ratio for all leading U.S. companies. (Round your answers to three decimal places.) ( , ) Interpret a 95% confidence interval for the mean P/E ratio for all leading U.S. companies. ' There is a 95% chance that the true mean P/E ratio for all leading U.S. companies is directly in the middle of these two values. ' There is a 95% chance that the true mean P/E iatio for all leading U.S. companies is between these two values. ' We are 95% confident that the true mean P/E ratio for all leading U.S. companies is directly in the middle of these two values. ' We are 95% confident that the true mean P/E ratio for all leading U.S. companies is between these two values. ' There is a 95% chance that the true mean P/E ratio for all leading U.S. companies is one of these two values. what assumptions must be reasonable for this confidence interval to be appropriate? (Select all that apply.) ' The distribution of P/E ratios for all leading U.S. companies is normally distributed. The distribution of P/E ratios is normally distributed. The sample of P/E ratios is a random sample from the population of P/E ratios from all leading companies. ' There is no variation in P/E ratios among all leading companies. There is no variation in P/E ratios among all companies. ' The sample of P/E ratios is a random sample from the population of all P/E ratios from all companies
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