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The Use of Price to Book Ratios to Select Stocks

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The use of price to book ratios to select stocks
Suggests that


Definitions:

Inflation

The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.

Random Variation

The variability in data that arises due to chance and cannot be attributed to any specific cause or pattern.

Stock Market Prices

The current price at which shares of a company are bought and sold in the stock market.

Three-period Moving Averages

An averaging technique that uses the mean of three sequential data points to smooth out short-term fluctuations and highlight longer-term trends or cycles.

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