Investors Are Willing to Purchase Stocks Having High P/E Ratios

question 19

Multiple Choice

Investors are willing to purchase stocks having high P/E ratios because:

• A) they expect these shares to sell for a lower price.
• B) they expect these shares to offer higher dividend payments.
• C) these shares are accompanied by guaranteed earnings.
• D) they expect these shares to have greater growth opportunities.

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Definitions:

Murder Rate

a statistic measuring the number of murders per unit of population within a specified time frame, commonly used as a crime rate indicator.

Independent Variables

Variables in an experimental setting that are manipulated to observe their effect on dependent variables.

Dependent Variables

Variables in an experiment that are expected to change as a result of the manipulation of the independent variable.

Hormone Levels

The concentration of hormones in the bloodstream, which can affect various bodily functions.