What Is the Key Difference Between Historical PER and Prospective

question 22

Multiple Choice

What is the key difference between historical PER and prospective PER?

• A) Prospective PER uses next year's share price; historical PER uses last year's price.
• B) Prospective PER uses last year's earnings and the current share price; historical PER uses next year's earnings and the current share price.
• C) Prospective PER uses next year's earnings and next year's price; historical PER uses last year's earnings and last year's price.
• D) Prospective PER uses next year's earnings and the current share price; historical PER uses last year's earnings and the current share price.

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Definitions:

Preoperational Stage

A stage in Piaget's theory of cognitive development, occurring roughly between the ages of 2 and 7, marked by rapid language acquisition and symbolic thinking.

Age

A measure of the time an individual or object has existed, often used to describe developmental stages in humans.

Egocentrism

An important feature of preoperational thought: the inability to distinguish between one’s own and someone else’s perspective.

Animism

A facet of preoperational thought: the belief that inanimate objects have lifelike qualities and are capable of action.