Studies of the Relationship Between P/E Ratios and Stock Returns

question 54

Multiple Choice

Studies of the relationship between P/E ratios and stock returns have found that

• A) low P/E stocks of large cap stocks outperformed low P/E stocks of small cap stocks.
• B) low P/E stocks of small cap stocks outperformed high P/E stocks of large cap stocks.
• C) high P/E stocks of large cap stocks outperformed low P/E stocks of small cap stocks.
• D) high P/E stocks of large cap stocks outperformed high P/E stocks of small cap stocks.
• E) low P/E stocks of small cap stocks equaled the performance high P/E stocks of large cap stocks.

---

Definitions:

Pencil and Paper

Traditional, manual method of writing, drawing, or calculating, often used for tests, sketches, or notes.

Civil Rights Act

A landmark piece of legislation in the United States that outlawed discrimination based on race, color, religion, sex, or national origin, primarily known for its impact on ending segregation in public places and banning employment discrimination.

Equal Employment Opportunity (EEO)

A principle that ensures individuals have equal opportunity for employment and advancement without discrimination based on characteristics like race, gender, age, or religion.

Americans with Disabilities Act (ADA)

U.S. legislation that prohibits discrimination against individuals with disabilities in all areas of public life.