The Return on Assets Ratio Is Affected by the

question 52

Multiple Choice

The return on assets ratio is affected by the

• A)profit margin and debt to total assets ratios.
• B)profit margin and asset turnover ratios.
• C)times interest earned and debt to total assets ratios.
• D)profit margin and free cash flow.

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Definitions:

Mean-Variance Efficient Portfolio

An investment portfolio that aims for the highest expected return for a given level of risk or the lowest level of risk for a given expected return.

Single-Index Structure

A model used in finance that relates the returns of a stock to the returns of a market index through a single beta factor.

Covariances

A measure indicating the extent to which two variables change in tandem over time.

Well-Diversified Portfolio

A collection of investments that spans various assets to minimize risk while maximizing returns.