Which One of the Following Typically Strives to Earn a Return

question 30

Multiple Choice

Which one of the following typically strives to earn a return on their investments that exceeds the actuarially determined rate of return?

• A) Banks
• B) Thrifts
• C) Mutual funds
• D) Pension funds

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Definitions:

P/E Ratio

Price-to-Earnings Ratio, a valuation metric comparing the current share price of a company to its per-share earnings, used to evaluate if the stock is overvalued or undervalued.

ROE

Return on equity, a financial ratio that measures the profitability of a company by indicating how much profit a company generates with the money shareholders have invested.

Market-To-Book Value

A ratio used to compare a company's current market value to its book value, indicating how investors value the company relative to its actual assets.

Quick Ratio

A measure of liquidity similar to the current ratio except for exclusion of inventories. It equals cash plus receivables divided by current liabilities.