Question

1. Rank bonds, common stock, and preferred stock with regard to    two factors the possibility of a substantial increase in value. Rank these same securities with regard to investors' legal claims for repayment on their investments.

   2. Would a relatively high P/E ratio lead us to conclude that a stock is overvalued or undervalued? Why or why not?

Note :- Please avoid Plagiarism

Answer 1

Question1. Rank bonds, common stock, and preferred stock with regard to    two factors the possibility of a substantial increase in value. Rank these same securities with regard to investors' legal claims for repayment on their investments.

Anwer- Rank of legal claims-

1.Rank bonds

2. Preferred stock

3.Common stock

Question2. Would a relatively high P/E ratio lead us to conclude that a stock is overvalued or undervalued? Why or why not?

Anwer - yes ofcourse, P/E ratio would lead us to conclude that wether a stock is overvalued or undervalued because price earning ratio indicates how much to invest in a company get 1 dollar or how much we need are investing to earn a company's profit.

Hope it helps!