📈 CFA Exam Prep

The DuPont decomposition breaks ROE into:

A Two components
B Three components: profit margin, asset turnover, and financial leverage
C Five components
D Only one measure

✓ Correct Answer: Option B

3-component DuPont: ROE = (NI/Sales) × (Sales/Assets) × (Assets/Equity) = Margin × Turnover × Leverage.

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