For a Firm That Has No Debt in Its Capital

question 53

Multiple Choice

For a firm that has no debt in its capital structure,

• A) ROE > ROA.
• B) ROE < ROA.
• C) ROE = ROA.
• D) None of the above.

---

Definitions:

Available-For-Sale

A classification for investments in securities that are not actively traded or held to maturity, allowing gains or losses to be recorded in equity.

Trading

The act of buying and selling securities, commodities, or other financial instruments in financial markets with the aim of profiting from price movements.

Trading Securities

Financial instruments that are purchased and held primarily for selling them in the near term, with the objective of generating profits on short-term price differences.

Available-For-Sale Securities

Debt or equity securities not classified as held-to-maturity or trading securities, measured at fair value with changes recognized in other comprehensive income.