A Stock That Has a Low Price-To-Earnings Ratio and a Low

question 32

True/False

A stock that has a low price-to-earnings ratio and a low price-to-book ratio is an indicator of a stock that is expected to have slow or negative growth in earnings and a low return on common stockholders' equity.

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Definitions:

Evolutionary Psychology

A theoretical approach in psychology that explains mental and psychological traits—such as memory, perception, or language—as adaptations, i.e., the functional products of natural selection.

Natural Selection

The process by which organisms better adapted to their environment tend to survive and produce more offspring, driving evolution.

Organisms' Success

The extent to which an organism can survive, reproduce, and pass its genes to the next generation in its specific environment.

Adaptive Function

Traits or behaviors that have evolved to serve a specific survival or reproductive purpose in the context of natural selection.