When the price earnings (P/E) ratio for a company increases from 20A to 20B, it means the company's investors

A. believe the future earnings will exceed the current earnings level.
B. believe the future earnings will be lower than the current earnings level.
C. are confident about the company's future operating effectiveness.
D. are not confident about the company's future operating effectiveness.
E. both A and C are true.

Ans: E. both A and C are true.