A Higher Price-Earnings Ratio Generally Means That

question 60

Multiple Choice

A higher price-earnings ratio generally means that

• A) investors favour that company and have a high expectation of future profitability.
• B) investors do not expect future profitability.
• C) investors feel the shares are underpriced.
• D) investors will not see growth or expansion.

---

Definitions:

Mississauga Campus

A specific location of an educational institution situated in Mississauga, often referencing a branch of a university or college.

Significance Level

The significance level is the probability of rejecting the null hypothesis in a statistical test when it is actually true, typically represented by the symbol alpha (α) and used as a threshold for determining statistical significance.

High Blood Pressure

A condition in which the force of the blood against the artery walls is too high, often leading to health problems such as heart disease.

Treatment Population Mean

The average outcome or response of the population receiving a specific treatment in a study.