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Wiseguys Inc. had an ROA of 1.65% in 2019, but reported an astounding ROE of 52.00%! Which of the following is a plausible explanation for

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Wiseguys Inc. had an ROA of 1.65% in 2019, but reported an astounding ROE of 52.00%! Which of the following is a plausible explanation for why this could be? Wiseguys has very little debt relative to assets, and as such their equity is relatively high making ROE appear very high. Wiseguys is in a business which requires a very large asset base, but also may require very high leverage. Therefore, ROA appears low and ROE appears high. Wiseguys is in a business which requires a very small asset base, but also may require very low leverage. Therefore, ROA appears low and ROE appears high. None of the above

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