n NISM Certifications
XV NISM Series XV
Medium

A low Price to Book (P/B) value of a company generally indicates what about the company's assets?

Practice question from NISM XV Mock Test 7 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    The assets are expensive

  2. The assets are cheap

    Correct answer

  3. C

    The management is prudent

  4. D

    P/B Ratio as such gives no indication

Why this is the answer

Low P/B suggests the stock is trading below the book value of its assets, implying assets are cheap relative to their value.

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