During the 2008-2009 Recession,the Average P/E Ratio of Firms in the U.S.stock

question 9

Multiple Choice

During the 2008-2009 recession,the average P/E ratio of firms in the U.S.stock market reached an extraordinarily high level because ________.

• A)investors believed short-term growth prospects for U.S.firms were extraordinarily good at that time
• B)stock prices generally boomed during the recession
• C)earnings per share were unusually low during the recession
• D)investors believed long-term growth prospects coming out of the recession were not very good