The Use of Price to Book Ratios to Select Stocks

question 10

Multiple Choice

The use of price to book ratios to select stocks suggests that

• A)high price to book stocks are undervalued
• B)low price to book stocks are overvalued
• C)a stock should be purchased if it is selling near its historic high price to book ratio
• D)a stock should be purchased if it is selling near its historic low price to book ratio

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Definitions:

Brand Personality Destruction

The detriment or adverse alteration of a brand's perceived characteristics and identity, often caused by negative events, scandals, or poor marketing decisions.

Consumer Loyalty

The ongoing preference of a customer to buy a particular brand or product over competitors, often reflected in repeat purchases.

Brand Dilution

The weakening of a brand's power or the diminishing of its perceived value due to overextension, poor marketing decisions, or association with lower quality products.

Brand Extension

A marketing strategy where a company uses an existing brand name to launch a new product in a different category, leveraging brand equity.