Assuming No Changes in Other Variables, Which of the Following

question 101

Multiple Choice

Assuming no changes in other variables, which of the following would increase ROA?

• A)An increase in the effective tax rate.
• B)A decrease in interest expense.
• C)An increase in average assets.
• D)A decrease in average assets.

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Definitions:

Interest Rate Futures

Futures contracts that speculate on the future value of interest rates, allowing investors to hedge or speculate on changes in interest rates.

Initial Margin

The minimum amount of funds required to open a new position in a market, serving as a security deposit to cover credit risk.

Futures Price

The agreed-upon price for the future delivery of an asset such as a physical commodity or a financial instrument, as determined in the futures market.

Creation

The process of originating something new or bringing something into existence, often used in contexts ranging from art to finance.