1) The use of P/E ratios to select stocks suggests that a. low P/E ratio stocks
ID: 2624062 • Letter: 1
Question
1) The use of P/E ratios to select stocks suggests that
a.
low P/E ratio stocks are overvalued
b.
a stock should be purchased if it is selling near its historic high P/E
c.
high P/E stocks should be purchased
d.
a stock should be purchased if it is selling near its historic low P/E
2)
Use of P/E ratios will not produce superior investment results according to the
Answer
a.
all forms of the efficient market hypothesis
b.
semi-strong form of the efficient market hypothesis
c.
weak form of the efficient market hypothesis
d.
strong form of the efficient market hypothesis
a.
low P/E ratio stocks are overvalued
b.
a stock should be purchased if it is selling near its historic high P/E
c.
high P/E stocks should be purchased
d.
a stock should be purchased if it is selling near its historic low P/E
Explanation / Answer
a stock should be purchased if it is selling near its historic high P/E,
a stock should be purchased if it is selling near its historic low P/E
b.
semi-strong form of the efficient market hypothesis
c.
weak form of the efficient market hypothesis
b.
semi-strong form of the efficient market hypothesis
c.
weak form of the efficient market hypothesis
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