Which of the Following Is True of a Firm That

question 80

Multiple Choice

Which of the following is true of a firm that has both debt and equity?

• A) Its return on equity (ROE) will be greater than its return on asset (ROA).
• B) Its return on equity (ROE) will be lesser than its return on asset (ROA).
• C) Its return on equity (ROE) will be equal to its return on asset (ROA).
• D) None of the above.

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Definitions:

Demand Stimulation

A set of measures aimed at increasing consumer desire and ability to purchase goods and services.

Fed

Informally refers to the Federal Reserve System, the central banking system of the United States, responsible for monetary policy.

Credit Availability

The ease with which individuals or businesses can obtain loans or access credit from financial institutions.

Military-Industrial Complex

A concept referring to the close relationship between a country's military and the defense industry that supplies it, often suggesting influences on national policy.