A Low Price-Earnings Ratio Indicates That Either the Stock Is

question 99

Multiple Choice

A low price-earnings ratio indicates that either the stock is

• A)undervalued or people are relatively optimistic about the corporation's prospects.
• B)overvalued or people are relatively optimistic about the corporation's prospects.
• C)overvalued or people are relatively pessimistic about the corporation's prospects.
• D)undervalued or people are relatively pessimistic about the corporation's prospects.

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Definitions:

Worse

indicates a lower quality or more negative condition compared to another situation, condition, or outcome.

Better

An improved or superior condition, quality, or performance compared to a previous state.

High

A state of being under the influence of drugs or substances, which alters mood, perception, or consciousness.

Medium

A substance or material that carries or conducts something, such as waves or messages.