Given below is the scatter plot of the price/earnings ratio versus earnings per share of 20 U.S. companies. There appear to be a positive relationship between price/earnings ratio and earnings per share.
Definitions:
Liking Reciprocal
Reciprocal liking is the phenomenon where people tend to develop a preference for individuals who express liking for them, reinforcing mutual attraction and social bonding.
Opposite Qualities
Characteristics or attributes that are diametrically different from each other, often used to describe contrasting traits between entities or concepts.
Social Exchange Theory
A theoretical framework suggesting that social behavior is the result of an exchange process, aiming to maximize benefits and minimize costs.
Comparison Level
An expectation about the outcome of a relationship based on past experiences, which serves as a standard for evaluating current and future relationships.
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