The Slope of a Line Is Zero When It Is

question 31

Multiple Choice

The slope of a line is zero when it is:

• A) horizontal.
• B) vertical.
• C) an upward-sloping line that makes a 45-degree angle with the horizontal and vertical axes.
• D) a downward-sloping line that makes a 45-degree angle with the horizontal and vertical axes.

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Definitions:

Earnings Yields

The inverse of the price-to-earnings ratio, representing the earnings generated by a company per share relative to its share price, often used to compare the profitability of investments.

Treasury Yields

The returns on government securities that are considered risk-free; they serve as a benchmark for other interest rates.

Market-to-Book Ratio

A financial ratio that compares a company's market value (price of its stock) to its book value (total assets minus liabilities), used to evaluate whether a stock is under or overvalued.

Price-to-Sales Ratio

A valuation ratio comparing a company's stock price to its revenues, used to evaluate the company's size and growth potential.