CFA Practice Question

CFA Practice Question

The Murcky company has the following results during the recent period.

  • Net profit margin: 0.05
  • Total asset turnover: 2.30
  • Total asset/equity: 2.80

Using the Dupont model, find the firm's ROE.
A. 0.72
B. 0.68
C. 0.32
Explanation: ROE = Total asset turnover * Total assets/equity * Net profit margin = 0.05 * 2.30 * 2.80 = 0.32

User Contributed Comments 10

User Comment
LloydBraun7 Nice little 15 second question to balance out the 5 minute ones!
kellyyang I like this one!
sh21 loved it! :)
Insipidity Confidence booster :D
ColonelCFA You mean Confidence destroyer...
uahmed will it be this easy on the actual exam?
blink78597 i thought it had to be a trick, still got it right but took longer than the 5 seconds it should have
schweitzdm Will not be this easy on exam, you can count on that.
farhan92 i've become awfully suspicious of these easy questions so still took the time to write it out and follow the logic. Takes about 30 seconds but better safe than sorry.
ashish100 spent like 5 minutes overthinking this.
then finally it hit me

never again..
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