Over Time, What Observation(s) Best Characterizes How ROE for a Given

question 38

Multiple Choice

Over time, what observation(s) best characterizes how ROE for a given firm should behave?

I. ROE will increase because the firm becomes more efficient.
II. ROE will decrease because competition will erode profitability.
III. The answer depends on how conservative the firm's accounting policies are, which affects its reported earnings.

• A)I and III
• B)II and III
• C)I, II, and III are all possibilities
• D)None of the above

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Definitions:

Product Liability

Refers to the legal responsibility of manufacturers and sellers to compensate for harm caused by defective or unsafe products.

Damages Available

The types of compensation that a plaintiff can seek in a lawsuit, depending on the circumstances and the nature of the legal claim.

Warning Defect

is a term used in product liability to describe a situation where a product lacks adequate instructions or warnings, potentially leading to misuse or harm.

Product Liability

A legal concept where manufacturers, distributors, suppliers, and retailers are held responsible for any injuries their products cause.