Which of the Following Would NOT Adversely Affect Return on Equity

question 12

Multiple Choice

Which of the following would NOT adversely affect return on equity?

• A) an increase in company income tax
• B) transfers from retained profits to general reserve
• C) reduced margins in an aggressive market place
• D) a decrease in operating profit.

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Definitions:

Modified Duration

A measure of the sensitivity of a bond's price to changes in interest rates, reflecting how much the price is expected to change with a 1% move in rates.

Yield Change

A change in the rate of return on an investment, often used in the context of bonds to indicate a change in interest rates or bond prices.

Price Decline

A decrease in the market price of an asset or security over a certain period.

Zero-Coupon Bond

A bond that does not pay periodic interest payments and is issued at a discount to its face value, which is paid at maturity.