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To: Allen Sampson who wrote (12074)3/2/1998 2:10:00 PM
From: Skeptic  Read Replies (1) | Respond to of 31646
 
"As risk increases PE's go down"..I guess Microsoft is the ultimate risk free stock then..

Given the same expected return, the lower the perceived risk of a security, the higher its P/E will be. Microsoft has a high P/E because investors are very confident of receiving above-average returns well into the future.