QUESTION 19

1. Which of the following would cause a firm's ROE to be high, but the ROA to be low?

   		A low gross profit margin but a high net profit margin.
   		Financing a relatively large proportion of assets with equity.
   		Paying a very low interest rate on the firm's debts.
   		Leasing a large amount of equipment.
   		Financing a relatively large proportion of assets with debt.

6 points

QUESTION 20

1. The only quantitative measure of a consumer loan applicant's character is their:

   		down payment.
   		home equity.
   		time on the job.
   		credit report.
   		credit card balance.