To the Extent That Current Profits Are Directly Related to Future

question 43

Multiple Choice

To the extent that current profits are directly related to future profits, a high price/earnings ratio would indicate that stocks are

• A) inexpensive.
• B) expensive.
• C) going to increase in value in the future.
• D) most likely to fall in value if interest rates decline.

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Definitions:

Need for Affiliation

The desire to form close personal relationships and be part of a group.

Friendly Relations

Interpersonal connections characterized by mutual respect, positive regard, and cordiality, often contributing to a positive working environment.

Acquired Needs Theory

A theory that suggests people are motivated by their desire to achieve, gain power, or affiliate with others.

High-need Achievers

Individuals with a strong desire for success and accomplishment, often setting challenging goals and seeking feedback on their performance.