What Does Return on Equity Measure

question 103

Multiple Choice

What does return on equity measure?

• A) The amount of pre-tax profit earned for each dollar invested
• B) The amount of profit earned for each share of stock
• C) The amount of profit earned for each dollar of previous profit retained in the business
• D) The amount of profit earned for each dollar invested
• E) The amount of pre-tax profit earned for each share of stock

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Definitions:

Earnings Percent

Earnings percent refers to the proportion or percentage of income earned from an investment, work, or business operation relative to the initial cost or investment size.

Workforce

The total number of people employed or available for employment or work in a country, organization, or specific industry.

Crash Of 1929

The severe plunge in stock market prices that initiated the Great Depression, beginning in late October 1929.

Forced Savings

A policy or situation where people are required to save a portion of their income, either through government policies or economic conditions.