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.

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Definitions:

Sculpted Surface

A surface that has been shaped, carved, or modified to feature a three-dimensional pattern or form, often found in art and architecture.

Artistic Movement

A trend or style in art with a specific common philosophy or goal, shared by a group of artists during a restricted period of time.

Art Nouveau

French, “new art.” A late-19th- and early-20th-century art movement whose proponents tried to synthesize all the arts in an effort to create art based on natural forms that could be mass produced by technologies of the industrial age. The movement had other names in other countries: Jugendstil in Austria and Germany, Modernismo in Spain, and Stile Floreale in Italy.

Structural Techniques

Methods or strategies used in architecture and engineering to ensure the stability and durability of a structure.