Which of the Following Statements Is True

question 2

Multiple Choice

Which of the following statements is true?

• A)A company's financial leverage can't affect investment decisions and its operating efficiency.
• B)Banks and finance companies have much higher debt/equity ratios than those of retailers and manufacturers.
• C)Banks and finance companies have much lower debt/equity ratios than those of retailers and manufacturers.
• D)None of the given options.

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Definitions:

Total Returns

The complete return on an investment over a given time period, including both capital gains and dividends or interest.

Average Returns

The average amount of profit or loss generated by an investment over a specific period.

Technical Efficiency

Condition under which firms combine inputs to produce a given output as inexpensively as possible.

Empirical Research

A method of research that relies on the collection and analysis of data to obtain evidence that can be observed or measured.