The Price/earnings Ratio ________

question 253

Multiple Choice

The price/earnings ratio ________.

• A) represents the market price of one share of common stock
• B) of 8.5 implies that the company's earnings per share is 8.5 times the market price of one share of its common stock
• C) is used by investors to measure the liquidity of their portfolio
• D) is most useful when comparing one company to another

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Definitions:

Predatory Lending

Unscrupulous lending practices that impose unfair, deceptive, or abusive loan terms on borrowers, often leading to a debt trap.

Monthly Payments

Regular payments made on a loan or mortgage, usually consisting of principal and interest components, occurring once a month.

Commission-Driven Brokers

Financial agents whose earnings are primarily derived from commissions on sales or transactions they facilitate for clients.

Sarbanes-Oxley Act

A U.S. federal law passed in 2002 that set new or expanded requirements for all U.S. public company boards, management, and public accounting firms, aiming to protect investors from fraudulent financial reporting.