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.

---

Definitions:

Nasopharynx

The nasopharynx is the upper part of the pharynx connecting the nasal cavity above the soft palate, serving as a passageway for air from the nose to the throat.

Glottis

The opening between the vocal cords in the larynx, playing a critical role in speech and breathing.

Reverse Peristalsis

The backward movement of the contents of the digestive tract, which can lead to vomiting, as a result of the muscles contracting in the opposite direction of normal digestion.

Secretin

A hormone produced by the duodenum that stimulates the pancreas to release bicarbonate-rich fluids to neutralize stomach acid.