Which of the Following Statements Is FALSE

question 13

Multiple Choice

Which of the following statements is FALSE?

• A)The most common valuation multiple is the price-earnings (P/E)ratio.
• B)You should be willing to pay proportionally more for a stock with lower current earnings.
• C)A firm's P/E ratio is equal to the share price divided by its earnings per share.
• D)The intuition behind the use of the P/E ratio is that when you buy a stock,you are in sense buying the rights to the firm's future earnings and differences in the scale of the firms' earnings are likely to persist.

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Definitions:

Alfred Binet

A French psychologist who, along with Theodore Simon, developed the first practical IQ test, the Binet-Simon scale, pioneering intelligence testing.

Individual Differences

Variations among individuals in their behaviors, abilities, experiences, or preferences, acknowledging that every person is unique.

Cognitive Challenges

Problems or difficulties in processing information, thinking, reasoning, or remembering.

Intelligence Scale

A method used to measure an individual's intellectual capabilities in various dimensions, usually resulting in a score.