Generally,a Relatively High P/E Ratio Indicates

question 202

Multiple Choice

Generally,a relatively high P/E ratio indicates:

• A)improvements in future profitability.
• B)diminished future profitability.
• C)a high level of debt financing.
• D)a high current return for shareholders of a company.

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Definitions:

Effective Yield

The return on a bond or investment after adjusting for all charges and fees, as well as compounding.

Investment Balance

Investment balance refers to the current value of an investor's portfolio, taking into account all the assets held, including stocks, bonds, and other investments.

Held To Maturity

A classification for financial securities which the holder intends and is able to keep until they mature.

Effective Yield

A measure of the return on an investment, accounting for the effect of compounding interest more accurately than nominal yield.