Return on Common Stockholders' Equity Is Most Closely Related to

question 81

Multiple Choice

Return on common stockholders' equity is most closely related to

• A)gross profit rate and operating expenses to sales ratio.
• B)profit margin and free cash flow.
• C)times interest earned and debt to stockholders' equity ratio.
• D)return on assets and leverage (debt to assets ratio).

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Definitions:

Convexity

The curvature of the price–yield relationship of a bond.

Yield

The annual percentage yield received from an investment, including interest or dividends, relative to the cost of that investment.

Rate Anticipation Swap

A switch made between bonds of different durations in response to forecasts of interest rates.

Portfolio Duration

A measure of the sensitivity of a portfolio's value to changes in interest rates, often used for managing the interest rate risk.