Which of the Following Is True

question 75

Multiple Choice

Which of the following is true?

• A)Historically, high P/E or growth stocks have outperformed low P/E or value stocks.
• B)Historically, low P/E or value stocks have outperformed high P/E or growth stocks.
• C)After adjusting for risk, high P/E or growth stocks and low P/E or value stocks have performed about the same over time.
• D)the P/E effect is limited to U.S.stocks.

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Definitions:

Balance Sheet

A financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time.

Capital Intensity Ratio

A metric that measures a company's assets in relation to its labor, used to evaluate how much capital is used in production.

Full Capacity

The maximum level of output that a company can sustain over a period, usually determined by its physical, technical, or operational constraints.

Total Assets

The sum of all assets owned by an entity, including both current and non-current assets, as recorded on the balance sheet.