Business, 23.03.2020 20:28 Baby010391

The S&P 500 Index is one of the most commonly used benchmark indices for the U. S. equity markets. Consisting of 500 companies, it is a market value-weighted index. This means that each company's performance is reflected in the index, weighted by the ratio of the company's value to the total value of all the companies. Based on your understanding of P/E ratios, in which of the following situations would the average trailing P/E ratio (current price divided by earnings per share over the previous 12 months) of the S&P 500 Index be higher?
a. The outlook for the economy and the markets is for a downturn.
b. The outlook for the economy and the markets is for improvement.
You invest $100,000 in 40 stocks, 20 bonds, and a certificate of deposit (CD). What kind of risk will you primarily be exposed to?
a. Stand-alone risk
b. Portfolio risk
Generally, investors would prefer to invest in assets that have:
a. A higher-than-average expected rate of return given the perceived risk
b. A lower-than-average expected rate of return given the perceived risk

Answers: 3

Show answers

Answers

Answer from: gwendallinesikes

The average P / E ratio would be higher when the outlook for the economy and markets predict an improvement

The type of risk you will be exposed to portfolio risk

Investors would prefer to invest in assets that have a higher-than-average expected rate of return given the perceived risk

The price to earning ratio is a financial valuation metric. It compares the price of a stock to the earnings of the stock.

Price to earning ratio (P / E) = market value per share / earnings per share

Types of P/E ratio

Trailing P / E - it is determined by dividing current share price by the earnings per share over the 12 months Forward P/ E - it is determined by dividing current share price by the estimated earnings per share over the next 12 months

Factors that affect the P/E ratio

Economic outlook : a positive economic ratio signifies positive growth of the economy. A positive economic outlook would mean that investors would buy assets. This would lead to a rise in the price of stocks. This would lead to a higher P/E ratio Dividend payout ratio : the higher the payout ratio, the lower the retained earnings. the lower the retained earnings, the less there would be resources available to expand the company. This would lead to a lower P/E ratio

Portfolio risk is the risk inherent in a portfolio. A portfolio is group of investment. The certificate of deposit, bonds and stocks constitute a portfolio

A rational investor would prefer an asset that has a higher expected return when compared with its risk. This means that the investment would be profitable.

For example, if an investor is presented with a group of Sharpe ratios for an investment, the investor is likely to choose the investment with the highest Sharpe ratio.

Sharpe ratio = expected return / standard deviation

To learn more about trailing p/e ratio, please check:

Answer from: Quest

answer; ///i believe the best answer from the above question is (c) a method of making a purchase by trading items instead of using money; plz check first.good luck

Answer from: Quest

they can see what that city is producing and to also see if they can some how get that product. like gold in africa.

Another question on Business

Business, 22.06.2019 08:20

(05.04 mc) a 2012 report from the u.s. surgeon general stated: "another common practice is strategically locating tobacco-related marketing materials where young children will be exposed to them. tobacco industry executives acknowledge that products and advertising should be placed at eye level (pollay 2007), but in california, 48% of stores had at least one cigarette marketing item at or below 3 feet from the floor (feighery et al. 2001)." it was also noted that 25% of cigarette displays were next to candy. in addition, a national study found that about one-third of the stores had tobacco ads at low heights. after california banned counter displays, some stores place cigarettes in transparent displays so product brands could still be seen. why did some stores use transparent units to display the cigarettes? (3 points) to comply with the new rules while still encouraging cigarette purchases via visual exposure to ensure children and minors are not exposed to cigarettes and their eye-catching packaging to minimize exposure to humidity, extending the shelf life of the cigarettes' tobacco to reduce the occurrence of shoplifting, since cigarettes are high-revenue items

Answers: 3

Answer

Business, 23.06.2019 02:30

Astudent finds data on an internet site that contains financial information about selected companies. he plans to analyze the data and use the results to develop a stock investment strategy. what kind of data source is he using? what concerns might you have about drawing conclusions from this data set?

Answers: 1

Answer

Business, 23.06.2019 14:30

Anew japanese restaurant opens two blocks from your home. the owner, reiko, is a personal friend of yours. you don't particularly like japanese food, but you decide to go anyway; however, there is nothing on the menu that sounds appealing. unfortunately, it turns out that most of the people in your town don't like japanese cuisine either. reiko confides that business is not good, but she isn't sure what to do from an economic standpoint. which of the following would most likely describe adam smith's perspective on this problem? select one: a. reiko should ask the government for assistance. b. reiko should close the restaurant and find a different career. c. reiko should lay off workers and do everything herself to save money. d. reiko should add other foods to the menu and offer discounts to attract more people to her restaurant.

Answers: 1

Answer

Business, 23.06.2019 23:00

Max and mimi are using a method of birth control that requires mimi to carefully observe changes in the secretions from her cervix to predict ovulation. this couple is using the method.

Answers: 2

Answer

You know the right answer?

The S&P 500 Index is one of the most commonly used benchmark indices for the U. S. equity market...

Questions