If a Company's P/E Ratio Suddenly Decreases

question 208

Multiple Choice

If a company's P/E ratio suddenly decreases:

• A)you should sell the stock as soon as possible.
• B)you should buy more of the stock to increase your average gain.
• C)the company probably announced higher earnings forecasts.
• D)the market must have reacted to some bad news that is expected to affect the company in the future.

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Definitions:

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A fixed or stable rate that does not change over a specified period of time.

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