Click the image icon to open the Image Settings window. You will see a check box labeled "Maintain aspect ratio." If this box is not checked, then the software will stretch the graphic to fit the print field. If this box is checked, then the graphic will appear at its original aspect ratio (in other words, not stretched or distorted).
The Image Settings window also acts as a preview for this feature. After you select a graphic, you can check or uncheck the "Maintain aspect ratio" box and immediately see what the graphic would look like when it is printed.