Over Time, What Observation(s) Best Characterizes How ROE for a Given

question 38

Multiple Choice

Over time, what observation(s) best characterizes how ROE for a given firm should behave?

I. ROE will increase because the firm becomes more efficient.
II. ROE will decrease because competition will erode profitability.
III. The answer depends on how conservative the firm's accounting policies are, which affects its reported earnings.

• A)I and III
• B)II and III
• C)I, II, and III are all possibilities
• D)None of the above

---

Definitions:

Classical

Pertaining to ancient Greek or Roman art, architecture, and culture, characterized by harmony, proportion, and adherence to established standards of beauty.

Nike of Samothrace

An ancient Greek sculpture representing the goddess Nike, celebrated for its portrayal of movement and considered a masterpiece of Hellenistic art.

Ship's Prow

The forwardmost part of a ship's hull; it cuts the water and is often ornately decorated in historical and some modern vessels.

Temple of Apollo

An ancient Greek sanctuary dedicated to Apollo, the god of music, healing, and prophecy.