The Importance of the Cyclically Adjusted Price-to-Earnings (CAPE) Ratio

This quiz tests your understanding of the Shiller CAPE ratio and its significance in investing, based on the video transcript.

Business mixed 8 Questions Video Quiz

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Q1 Beginner 1 pts

What is the Shiller CAPE ratio? Video Reference:
"the cyclically adjusted price to earnings ratio or the Shiller price to earnings ratio..."

Timestamp: 0:10

The current price-to-earnings ratio The 10-year average real earnings price-to-earnings ratio The price-to-book ratio The dividend yield

Q2 Intermediate 2 pts

What is the current level of the Shiller CAPE ratio compared to historical levels? Video Reference:
"now we are at the second most expensive cycle peak in the history of the US Stock Market..."

Timestamp: 1:00

Below the historical average At the historical average Slightly above the historical average The second most expensive cycle peak in the history of the US Stock Market

Q3 Intermediate 2 pts

What is the historical average Shiller CAPE ratio? Video Reference:
"the historical average is 17..."

Timestamp: 2:30

10 17 25 38

Q4 Intermediate 2 pts

True or False: The Shiller CAPE ratio is a reliable indicator of market valuation. Video Reference:
"to me one of the most important metrics when it comes to investing is the cyclically adjusted price ..."

Timestamp: 0:10

True

False

Q5 Advanced 3 pts

Which of the following factors have contributed to the high Shiller CAPE ratio? Video Reference:
"with zero interest rates with money printing everything done to push earnings higher we have that cr..."

Timestamp: 1:20

Select all correct answers

Zero interest rates Money printing Lower taxes All of the above

Q6 Advanced 3 pts

True or False: The Shiller CAPE ratio is a better indicator of market valuation than Wall Street's earnings projections. Video Reference:
"Wall Street's projections are for earnings to go from the 200 that are real earnings not what Wall S..."

Timestamp: 1:40

True

False

Q7 Advanced 3 pts

Which of the following are potential consequences of a high Shiller CAPE ratio? Video Reference:
"each time the Shiller p ratio was that high the crashes afterwards were terrible 85% 75% and about 6..."

Timestamp: 1:10

Select all correct answers

Increased risk of market crashes Lower future returns Higher volatility All of the above

Q8 Intermediate 2 pts

What does the video suggest investors should do when the Shiller CAPE ratio is high? Video Reference:
"when those things become bad you must be here on this channel and spend your money..."

Timestamp: 2:40

Buy more stocks Sell all their stocks Hold cash and wait for a better opportunity Invest in alternative assets

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The Importance of the Cyclically Adjusted Price-to-Earnings (CAPE) Ratio

What is the Shiller CAPE ratio? Video Reference: "the cyclically adjusted price to earnings ratio or the Shiller price to earnings ratio..." Timestamp: 0:10

What is the current level of the Shiller CAPE ratio compared to historical levels? Video Reference: "now we are at the second most expensive cycle peak in the history of the US Stock Market..." Timestamp: 1:00

What is the historical average Shiller CAPE ratio? Video Reference: "the historical average is 17..." Timestamp: 2:30

True or False: The Shiller CAPE ratio is a reliable indicator of market valuation. Video Reference: "to me one of the most important metrics when it comes to investing is the cyclically adjusted price ..." Timestamp: 0:10

Which of the following factors have contributed to the high Shiller CAPE ratio? Video Reference: "with zero interest rates with money printing everything done to push earnings higher we have that cr..." Timestamp: 1:20

True or False: The Shiller CAPE ratio is a better indicator of market valuation than Wall Street's earnings projections. Video Reference: "Wall Street's projections are for earnings to go from the 200 that are real earnings not what Wall S..." Timestamp: 1:40

Which of the following are potential consequences of a high Shiller CAPE ratio? Video Reference: "each time the Shiller p ratio was that high the crashes afterwards were terrible 85% 75% and about 6..." Timestamp: 1:10

What does the video suggest investors should do when the Shiller CAPE ratio is high? Video Reference: "when those things become bad you must be here on this channel and spend your money..." Timestamp: 2:40