If the Total Assets of a fiRm Decrease While All

question 316

Multiple Choice

If the total assets of a firm decrease while all other components of ROE remain unchanged, you would expect the firm's:

• A) ROE to increase.
• B) ROA to decrease.
• C) Equity multiplier to increase.
• D) ROE to remain unchanged.
• E) Profit margin to decrease.

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Definitions:

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The legal responsibility for a person or entity for criminal actions or omissions that violate laws, leading to prosecution and punishment.

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Intentionally left out or excluded, often referring to information or actions that should have been included or taken.

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The process of registering securities with the appropriate regulatory authority, making the details of the security public and adhering to regulations before they can be sold to investors.

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