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**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

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**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.. |