A High Price-Earnings Ratio for a Stock Indicates That Either

question 14

Multiple Choice

A high price-earnings ratio for a stock indicates that either the stock is

• A)undervalued or people are relatively optimistic about the corporation's prospects.
• B)overvalued or people are relatively optimistic about the corporation's prospects.
• C)overvalued or people are relatively pessimistic about the corporation's prospects.
• D)undervalued or people are relatively pessimistic about the corporation's prospects.

---

Definitions:

General Adaptation Syndrome

A theoretical model describing the body's short-term and long-term reactions to stress, developed by Hans Selye.

Hypothalamus

A region of the brain below the thalamus that coordinates both the autonomic nervous system and the activity of the pituitary, controlling body temperature, thirst, hunger, and other homeostatic systems.

Endocrine Glands

Glands of the endocrine system that release hormones directly into the bloodstream to regulate various bodily functions.

Psychoneuroimmunologist

A scientist who studies the interaction between psychological processes, the nervous system, and the immune system.