Select all that are true with respect to a Price/Earnings (P/E) ratio. Low P/E stocks are good investments, high P/E stocks are bad investments. A P/E ratio tells you how much you pay per $1 of a firm's earnings when you buy the stock. A P/E ratio tells you the ratio of a firm's stock price relative to its earnings per share. A stock that trades at a P/E of 10 is a better investment than a stock that trades at a P/E of 20. A stock that trades at a P/E of 20 is a better investment than a stock that trades at a P/E of 10. Although not always the case, stocks with higher P/E ratios generally have higher growth prospects relative to their current level of earnings than stocks with lower P/E ratios