Question

Suppose that a firm has a price-earnings ratio which is higher than a value deemed to be normal. Investors tend to infer from this information that

	a.	the firm's bonds will increase in their ratings.
	b.	the firm's bonds will decrease in their ratings.
	c.	the firm's stock is over-valued and one should consider selling the stock.
	d.	the firm's stock is under-valued and one should consider buying the stock.
	e.	the firm will be paying increased dividends.

For an orderly transfer of a probate estate, an individual needs

	a.	to be married.
	b.	to have their parents living.
	c.	to have named beneficiaries for some of their assets.
	d.	to have completed a valid will.
	e.	to have an established retirement account.

Which type of tax has an "income cap," i.e. a maximum income that exempts the consumer from further taxes of this type for the rest of the year after their income reaches this level?

	a.	federal income taxes
	b.	Social Security taxes
	c.	Medicare taxes
	d.	all of the above
	e.	none of the above

Answer 1

Answer:- Option (c):- the firm's stock is over-valued and one should consider selling the stock.

Explanation:- If a firm has a price-earnings ratio which is higher than a value deemed to be normal, then Investors tend to infer from this information that a stock's price is high relative to earnings and it may possibly be overvalued.

Answer:- Option (d):- to have completed a valid will

Explanation:- For an orderly transfer of a probate estate, an individual needs to have completed a valid will. When a will is proved valid then it determines to whom and how your estate is transferred. With the validity of the will, supervision of  the orderly distribution of a decedent's assets is done.

Answer:- Option (b):- Social Security taxes

Explanation:- Social Security taxes have an income cap. There is a limit on the amount of the earnings that is taxed by Social Security which is known as the maximum taxable earnings and it changes each year.