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If a Company's P/E Ratio Suddenly Decreases

Question 208

Multiple Choice

If a company's P/E ratio suddenly decreases:


A) you should sell the stock as soon as possible.
B) you should buy more of the stock 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.

Correct Answer:

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