If a Stock Has a Much Higher Than Normal P/E

question 14

Multiple Choice

If a stock has a much higher than normal P/E ratio, investors probably expect

• A) slow growth in earnings.
• B) rapid growth in earnings.
• C) large increases in the price of the stock.
• D) a declining stock price

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Definitions:

Type O

A blood group in the ABO system characterized by the absence of A and B antigens on red cells and the presence of anti-A and anti-B antibodies in the plasma.

Universal Recipient

An individual with Type AB positive blood, who in theory can receive blood of any type in transfusions due to the absence of anti-A or anti-B antibodies.

Type AB

A blood group in the ABO blood type system characterized by the presence of both A and B antigens on the surface of red blood cells.

Indirect Approach

A communication method where the main point is presented after providing background or supporting information.