1a.

What does a price earnings (PE) ratio of 18 mean?

a For each $100 paid, you can expect $18 in annual dividends.

b For each $100 paid, you can expect $18 of annual earnings.

c For each $1 of annual earnings, you must pay $18 for the stock.

d For each $1 of annual dividends, you must pay $18 for the stock.

1b

What price do you pay for a $5,000 Treasury bond based on a quote of 118:14?

	a	$5,118.14
	b	$5,907.00
	c	$5,922.00
	d	$5,921.88