Quiz on Lesson ” (PE) Finding Basic Stock Terms “

What is the importance of understanding common stock terminology, as discussed in this lesson?

A. To make informed investment decisions

B. To understand accounting principles

C. To become a financial analyst

What is the difference between the income statement and the balance sheet?

A. The income statement shows a company's net income, while the balance sheet shows its total equity.

B. The income statement shows a company's assets, while the balance sheet shows its liabilities.

C. The income statement shows a company's revenue, while the balance sheet shows its expenses.

How is the price to earnings ratio (P/E ratio) calculated?

A. By dividing a company's net income by its number of shares outstanding

B. By dividing a company's stock price by its earnings per share

C. By dividing a company's total assets by its total liabilities.

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