You Observe That a Firm's ROE Is Above the Industry

question 51

Multiple Choice

You observe that a firm's ROE is above the industry average, but its profit margin and debt ratio are both below the industry average. Which of the following statements is CORRECT?

• A) its total assets turnover must equal the industry average.
• B) its total assets turnover must be above the industry average.
• C) its return on assets must equal the industry average.
• D) its tie ratio must be below the industry average.
• E) its total assets turnover must be below the industry average.

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Definitions:

Diversification

A risk management strategy that involves adding variety to a portfolio to spread out exposure and reduce the impact of volatility.

Market Penetration

The process of increasing the market share of a product or service within an existing market.

Marketing Plan

A comprehensive document or strategy that outlines an organization's marketing efforts, goals, and tactics for a specific period.

Marketing Tactics

Specific actions or strategies designed to achieve marketing objectives.