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Which company has the most risk from an investor's standpoint? Firm A has a PE of 9 2 times and Firm B has a PE

Which company has the most risk from an investor's standpoint? Firm A has a PE of

92

times and Firm B has a PE of

16

times. Assume both firms operate in the same industry. Firm A has fewer shares outstanding than Firm B

.

Multiple Choice

Firm A because it has fewer shares outstanding.

Firm A because it has the higher PE ratio.

Firm B because it has a lower PE ratio.

Firm B because it has more shares outstanding.

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