Which of the Following Statements About the Price/Sales Ratio Is

question 42

Multiple Choice

Which of the following statements about the Price/Sales ratio is true?

• A)All else equal, the higher the Price/Sales ratio the more attractive is the investment.
• B)Like the Price/Earnings ratio, it is subject to the 1/X problem.
• C)It can be misleading if you are valuing a firm within an industry that is using a different strategy from most other firms in the industry--e.g., a firm targeting low-volume, high
• Profit margins in an industry that typically goes for high volume, lower margins.
• D)All of the above are true statements.

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Definitions:

Unemployment Insurance

A government program that provides temporary financial assistance to individuals who have lost their jobs through no fault of their own, helping to mitigate the economic effects of unemployment.

Adult Population

The adult population consists of all individuals within a specified area or country who are considered adults, often defined as people aged 18 and over.

Labor Force

The total number of people employed or actively seeking employment in a country or region.

Natural Rate

Often refers to the natural rate of unemployment where the economy is in equilibrium, or the long-term interest rate unaffected by short-term fluctuations.