During the 1970s, the Price/earnings Ratio of Stocks in the S&P

question 118

Multiple Choice

During the 1970s, the price/earnings ratio of stocks in the S&P 500 was relatively low. This low P/E ratio was

• A) surprising because the inflation rate was high during the 1970s.
• B) not surprising because interest rates were low during the inflationary 1970s.
• C) not surprising because interest rates were high during the inflationary 1970s.
• D) surprising because the inflation rate was low during the 1970s.

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