Question
The median Price-Earnings (P/E) ratio of the Real Estate sector in the US market is above 50 times. In comparison, the median P/E ratio of
The median Price-Earnings (P/E) ratio of the Real Estate sector in the US market is above 50 times. In comparison, the median P/E ratio of the Materials sector in the US market is around 20 times. Based purely on the information given in this question, which sector do you think is overvalued? Select one: a. Both the Materials and the Real Estate sectors. b. The Real Estate sector. c. We cant tell! Different sectors have different characteristics (leverage, growth rates, among other things) that affect their P/E ratios. d. The Materials sector.
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