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.. |