A Higher Price/earnings Ratio Signifies a Higher Return on Investment

question 52

True/False

A higher price/earnings ratio signifies a higher return on investment.

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Definitions:

Industry

A category of business activity that produces goods or provides services, categorized by their focus and processes.

Marginal Cost Curve

A graphical representation showing how the cost of producing one more unit of a good affects the overall cost of production.

Joint Monthly Profit

The combined profit earned by two or more partners or businesses in a single month.

Cartel

An organization of sellers designed to coordinate supply and price decisions so that the joint profits of the members will be maximized. A cartel will seek to create a monopoly in the market for its product.