The Net Profit on Sales Ratio Measures the Owners' Rate

question 84

True/False

The net profit on sales ratio measures the owners' rate of return on the investment in the business.

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Definitions:

Stock's Beta

An indicator of how volatile a stock is compared to the general market, where a beta value above 1 signifies that the stock experiences more fluctuation than the market overall.

Standard Deviation

In finance, standard deviation measures the amount of variance or dispersion of a set of financial returns, indicating the investment's volatility.

Expansionary Fiscal Policy

An increase in government purchases, decrease in net taxes, or some combination of the two aimed at increasing aggregate demand enough to reduce unemployment and return the economy to its potential output; fiscal policy used to close a recessionary gap

Contractionary Fiscal Policy

A decrease in government purchases, increase in net taxes, or some combination of the two aimed at reducing aggregate demand enough to return the economy to potential output without worsening inflation; fiscal policy used to close an expansionary gap.