If a Company's P/E Ratio Suddenly Decreases

question 36

Multiple Choice

If a company's P/E ratio suddenly decreases:

• A)you should sell the shares as soon as possible.
• B)you should buy more of the shares to increase your average gain.
• C)the company probably announced higher earnings forecasts.
• D)the market must have reacted to some bad news that is expected to affect the company in the future.

---

Definitions:

Synaptic Pruning

The process of eliminating weaker synaptic connections while strengthening those that are used more frequently, crucial for healthy brain development.

Adolescents

The developmental stage that typically occurs between childhood and adulthood, often marked by physical, psychological, and social changes.

Attempted Suicides

Instances where an individual tries to end their own life but does not result in death.

Completed Suicides

Refers to instances where individuals succeed in taking their own lives, as opposed to attempted suicides where the individual survives.