Return on investment can be divided into two separate components
A) margin and profit.
B) margin and turnover.
C) value and turnover.
D) liquidity and margin.

Question

Quizplus · Accepted Answer

Return on investment (ROI) is the ratio of margin to turnover. Margin is the profit earned from an investment, while turnover is the amount of money invested. Therefore, ROI can be divided into two separate components: margin (or profit) and turnover. Option A is incorrect because profit is a component of ROI, not a separate component. Option C is incorrect because value is not relevant to ROI. Option D is incorrect because liquidity is not a component of ROI.

Return on Investment Can Be Divided into Two Separate Components