What Does a High Price/earnings Ratio Indicate

question 208

Multiple Choice

What does a high price/earnings ratio indicate?

• A) Either the stock is undervalued or people have become more optimistic about the corporation's prospects.
• B) Either the stock is overvalued or people have become more optimistic about the corporation's prospects.
• C) Either the stock is overvalued or people have become less optimistic about the corporation's prospects.
• D) Either the stock is undervalued or people have become less optimistic about the corporation's prospects.

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Definitions:

Anterior Cerebral Artery

A major artery supplying oxygenated blood to most midline portions of the frontal lobes and superior medial parietal lobes of the brain.

Frontal Lobes

The part of the brain located at the front of each cerebral hemisphere, responsible for voluntary movement, expressive language, and for managing higher level executive functions.

Cerebral Cortex

The outer layer of neural tissue of the cerebrum of the brain, playing a key role in memory, attention, perception, cognition, awareness, thought, language, and consciousness.

Systolic Pressure

The maximum arterial blood pressure during heart contraction, measured in millimeters of mercury (mmHg).