art mcqs

✅ The correct answer is C.
High price to earning ratio shows company’s high growth prospect. The price-to-earnings ratio indicates the dollar amount an investor can expect to invest in a company in order to receive one dollar of that company’s earnings.

✅ The correct answer is A.
An earning before interest, taxes, depreciation and amortization average multiple for publicly traded companies is classified as entity multiple. Enterprise multiple, also known as the EV multiple, is a ratio used to determine the value of a company. The enterprise multiple looks at a firm in the way that a potential acquirer would by considering the company’s debt.

✅ The correct answer is A.
An earning before interest, taxes, depreciation and amortization are calculated by subtracting operating cost from net sales. Earnings before interest and taxes is a measure of a firm’s profit that includes all incomes and expenses except interest expenses and income tax expenses.

✅ The correct answer is D.
Portfolio which consists of perfectly positive correlated assets having no effect of diversification. Diversification reduces the variability when the prices of individual assets are not perfectly correlated. In other words, investors can reduce their exposure to individual assets by holding a diversified portfolio of assets. As a result, diversification will allow for the same portfolio return with reduced risk.

✅ The correct answer is C.