What Does a High Price/earnings Ratio Indicate

question 208

Multiple Choice

What does a high price/earnings ratio indicate?

• A) Either the stock is undervalued or people have become more optimistic about the corporation's prospects.
• B) Either the stock is overvalued or people have become more optimistic about the corporation's prospects.
• C) Either the stock is overvalued or people have become less optimistic about the corporation's prospects.
• D) Either the stock is undervalued or people have become less optimistic about the corporation's prospects.

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Definitions:

Scope Creep

The gradual expansion of a project's scope, often resulting in delays, cost overruns, and deviation from original goals without proper authorization.

Step Change

A significant and rapid change or transformation, often improving a situation or system dramatically.

Crashing

The process of expediting project completion typically by adding more resources or by working extra hours, often resulting in increased costs.

Critical Path

The sequence of tasks that determines the minimum completion time for a project, where any delay will result in a delay of the entire project.