Which of the Following Is a Profitability Ratio

question 12

Multiple Choice

Which of the following is a profitability ratio?

• A) return on assets
• B) earnings per share
• C) price to earnings
• D) dividend yield

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Definitions:

Market Interest Rate

The prevailing rate of interest available in the marketplace for securities of similar risk and maturity.

Contractual Interest Rate

The interest rate stated on the face of a loan or bond agreement, which represents the percentage of interest that the borrower must pay to the lender.

Premium

The amount paid for an insurance policy or the amount by which a bond or stock sells above its face value.

Discount

A reduction from the usual cost of something, often used to encourage prompt payment or increase sales.