Average Fixed Cost

question 117

Multiple Choice

Average fixed cost:

• A) initially declines, reaches a minimum, and then begins to increase as output increases.
• B) increases continuously as output increases.
• C) declines continuously as output is expanded.
• D) keeps constant as output is expanded.

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Definitions:

Low P/E Ratios

Indicators that a company's stock is potentially undervalued, calculated by dividing the current market price by the earnings per share.

High P/E

A stock with a high price-to-earnings ratio, often indicating expectations of future growth or overvaluation.

Dividend Yields

An economic indicator demonstrating the yearly dividend distribution of a firm in comparison to its share price.

Submartingale

A stochastic process in which the conditional expected value of a future observation, given the past, is at least as great as the present observation, often applied in financial modeling.