You Observe That a Firm's ROE Is Above the Industry

question 23

Multiple Choice

You observe that a firm's ROE is above the industry average, but its profit margin and debt ratio are both below the industry average. Which of the following statements is CORRECT?

• A) Its total assets turnover must be above the industry average.
• B) Its return on assets must equal the industry average.
• C) Its TIE ratio must be below the industry average.
• D) Its total assets turnover must be below the industry average.
• E) Its total assets turnover must equal the industry average.

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Definitions:

Upper Class

A social group that is considered to be the highest tier in a society based on wealth, education, family background, and occupation.

GPA Over 3.0

A general academic achievement indicator showing that a student's Grade Point Average is above 3.0 on a 4.0 scale, usually reflecting above-average performance.

Upper Class

In a statistical context, refers to the higher end of a class interval in a frequency distribution, not to be confused with socioeconomic classifications.

GPA Between

Concerns the comparison or calculation of Grade Point Averages for different sets of students or periods.