If the Trailing P/E for the S&P 500 Is 18

question 63

Multiple Choice

If the trailing P/E for the S&P 500 is 18 and the forward P/E for the S&P 500 is 15, which of the following is true?

• A) The stock market is expected to decrease
• B) The stock market is expected to increase
• C) Corporate earnings are expected to decrease
• D) Corporate earnings are expected to increase

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Definitions:

Division of Labor

The assignment of different parts of a manufacturing process or task to different people in order to improve efficiency.

Standardized Engine

An engine design or specification that is uniformly applied across different vehicles or machinery to ensure compatibility and efficiency.

Automobile Manufacturer

A company engaged in the design, production, marketing, and selling of motor vehicles.

Protective Tariffs

Levies placed on goods brought into a country to safeguard local businesses against overseas competition by increasing the cost of foreign products.