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:

Population Locations

Refers to the geographical areas where specific populations reside.

Nonparametric Counterpart

A statistical method that does not assume a specific distribution for the data.

Parametric One-way Analysis

A type of parametric test that assesses for significant differences between more than two groups based on one independent variable.

Kruskal-Wallis Test

A nonparametric statistical test used to determine if there are statistically significant differences between three or more groups of an independent variable on a continuous or ordinal dependent variable.