Consider the return on equity, expressed like an interest rate in percentage points per year, for a
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5.5, 10.6, 19.0, 24.5, 6.6, 26.8, 6.2, –2.4, –28.3, 2.3
a. Find the average and standard deviation of the return on equity.
b. Interpret the standard deviation.
c. How many standard deviations below average is the worst performance?
d. Draw a histogram and indicate the average, the standard deviation, and the deviation of the worst performance.
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a The average is 708 The standard deviation is 1569 b Individua...View the full answer
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The Dupont analysis is an expanded return on equity formula, calculated by multiplying the net profit margin by the asset turnover by the equity multiplier. The DuPont analysis is also known as the DuPont identity or DuPont model.This Video will guide on how to calculate return on Equity and estimate profitability of shareholders using DuPont Analysis.
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