If, for the S&P Industrials Index, the Profit Margin Was

question 103

Multiple Choice

If, for the S&P Industrials Index, the profit margin was .25 and the equity turnover ratio was 12, the ROE would be

• A) 0.83 percent.
• B) 0.48 percent.
• C) 3.00 percent.
• D) 30.00 percent.
• E) 48.00 percent.

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Definitions:

Heuristic

A simple thinking strategy that often allows us to make judgments and solve problems efficiently; usually speedier but also more error-prone than algorithms.

Heuristics

Mental shortcuts or rules of thumb that simplify decision making, often used in problem-solving and judgment situations.

Algorithms

Step-by-step procedures or formulas for solving problems or completing tasks, often used in mathematics and computer science.

Overconfidence Phenomenon

The tendency for an individual to overestimate their abilities, performance, level of control, or chance of success.