A Company with a Low Return on Assets

question 65

Multiple Choice

A company with a low return on assets:

• A)is making profits.
• B)does not have debts.
• C)is not using its assets very productively.
• D)is lending its assets to other companies.
• E)does invest money in its assets.

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Definitions:

Stocks A and B

Placeholder names used in discussions to refer to two specific, but unspecified, stocks or to compare aspects of different stocks.

Return

The income generated from an investment, expressed as a percentage of the investment's original cost.

Markowitz Efficient Frontier

A graphical representation of the most efficient portfolios that provide the best possible return for a given level of risk.

Standard Deviation of Returns

A measure of the volatility of the returns on an investment, indicating the typical deviation from the average return.