Use the Given Stock Table to Answer the Question

question 27

Multiple Choice

Use the given stock table to answer the question.
-Based on the fact that stocks historically trade at an average P/E ratio of about 12-14, does the stock price of company ABC seem cheap, about right, or expensive right now?

• A)cheap
• B)about right
• C)expensive

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Definitions:

Fundamental Attribution Error

The tendency to overestimate personality-based explanations for others' behavior while underestimating situational explanations.

Dispositional Cause

Cause of behavior attributed to internal factors such as personality or character.

Situational Cause

Cause of behavior attributed to external factors, such as delays, the action of others, or some other aspect of the situation.

Fundamental Attribution Error

The tendency to attribute others' actions to their character or personality, while attributing our own behaviors to external situational factors.