A Total Asset Turnover Measure of 1

question 84

Multiple Choice

A total asset turnover measure of 1.03 means that a firm has $1.03 in:

• A) Total assets for every $1 in cash.
• B) Total assets for every $1 in total debt.
• C) Total assets for every $1 in equity.
• D) Sales for every $1 in total assets.
• E) Long-term assets for every $1 in short-term assets.

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Definitions:

Developed

Refers to countries or regions with advanced economic systems, typically characterized by high gross domestic product (GDP) and well-developed infrastructure.

Arbitrage Opportunity

The chance to buy an asset at a low price in one market and simultaneously sell it at a higher price in another market to profit from the price difference.

Risk-Free Rate

The estimated rate of profit from an investment void of risk, usually showcased by the return on government securities.

Expected Return

The projected average return on an investment, considering all possible outcomes weighted by their respective probabilities.