Question

An investor would prefer a PEG that is greater than 5 that is greater than 4...

An investor would prefer a PEG

that is greater than 5

that is greater than 4

that is less than 2

that is less than 1

Inflation is currently 3%. It is expected to rise sharply over the next 5 years. What should an investor do?

move assets from equity into bonds

move assets from real estate into equity

move assets from bonds into real estate

move assets from high-yield bonds into corporate bonds
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Homework Answers

Answer #1

The correct choice is : - That is less than 2

Explanation : -  A PEG of 1.0 to 2.0 may suggest the stock is reasonably valued, and a ratio greater than 2.0 may suggest the stock is overvalued.

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The correct choice is : - Move assets from bonds into real estate

Explanation : - Real estate provide a hedge against inflation. In an environment where inflationis rising, the value of real estate and real estate securities can be expected to increase as well. In times of high and rising inflation, investors have historically been rewarded by changing their asset allocation strategy to increase their investment in the real estate asset class. In contrast, treasury securities and fixed-income securities such as bonds have performed poorly during periods of high and rising inflation .

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