A Key Assumption of Using Price-Earnings Ratio as a Measure

question 18

Multiple Choice

A key assumption of using price-earnings ratio as a measure of a potential future asset-price bubble is that:

• A)past earnings are mirror images of the future.
• B)past earnings are a decent guide to future earnings.
• C)future earnings are known with certainty.
• D)inflation is zero.

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Definitions:

Job Satisfaction

The level of contentment employees feel about their work, which can affect their performance and motivation.

ERG Theory

ERG Theory is a motivational theory developed by Clayton P. Alderfer that categorizes human needs into three basic levels: Existence, Relatedness, and Growth, suggesting that these needs can be pursued simultaneously.

Alderfer

A psychologist known for developing the ERG (Existence, Relatedness, and Growth) theory as an extension of Maslow's hierarchy of needs.

Psychological Growth

The development of an individual’s emotional and cognitive capabilities and their capacity for adaptive behavior and understanding.