When Would the "Return on Equity" Equal the "Return on Assets

question 46

Multiple Choice

When would the "return on equity" equal the "return on assets"?

• A) Whenever the debt to equity ratio is one
• B) Whenever the debt ratio is zero
• C) Whenever a firm has positive net worth
• D) Whenever the firm has positive net worth and positive net income

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Definitions:

SSE

Sum of Squared Errors, a measure used in statistics to indicate the difference between the observed and predicted values by a model.

Coefficient Of Correlation

A numerical measure that quantifies the degree to which two variables are correlated, indicating the strength and direction of their relationship.

Coefficient Of Determination

A measure used in statistical analysis that assesses how well a model explains and predicts future outcomes, often denoted as R^2.

Coefficient Of Correlation

A statistical measure that calculates the strength and direction of a linear relationship between two variables.