The Mean Return on Equity (ROE) for a Group of Firms

question 97

Multiple Choice

The mean return on equity (ROE) for a group of firms in an industry is 15% with a variance of 9%. The coefficient of variation of the industry's ROE is ________.

• A) 0.2
• B) 0.6
• C) 1.7
• D) 5.0

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Definitions:

Cumulative Voting

A voting system that allows shareholders to allocate their total votes in any manner they choose among the candidates running for a position.

Minority Representation

The inclusion and representation of individuals from smaller or less dominant groups within a larger population, often in governance, organizations, or research.

Common Dividends

Payments made to shareholders from a company's earnings, reflecting the ownership interest in the corporation's profits.

Preemptive Rights

The right of existing shareholders to buy new shares before they are offered to the public, to maintain their proportionate ownership in the company.