Generally speaking,if interest rates fall and other factors remain constant,the P/E ratio of most companies company will:
A)become negative.
B)increase.
C)decrease.
D)become more volatile.

Question

Quizplus · Accepted Answer

When interest rates fall, it becomes cheaper for companies to borrow money and invest in growth opportunities. This leads to an increase in earnings, which in turn increases the P/E ratio. Therefore, option B is correct.

Generally Speaking,if Interest Rates Fall and Other Factors Remain Constant,the