AM 2014 - Q 5 :
Basically they ask to identify which of 3 DB plans has the lowest risk tolerance and to justify with one reason.
I answered which DB I thought was the right one, justifying with the fact that it has the highest Debt to Equity ratio.
That is correct, but in the guideline answer they also justify it by the fact that said DB also has the lowest Net Income Margin.
Therefore, they are obviously justifying it with 2 reasons, while the questions asks for one reason.
Can one of our scholars provide guidance ?
Basically they ask to identify which of 3 DB plans has the lowest risk tolerance and to justify with one reason.
I answered which DB I thought was the right one, justifying with the fact that it has the highest Debt to Equity ratio.
That is correct, but in the guideline answer they also justify it by the fact that said DB also has the lowest Net Income Margin.
Therefore, they are obviously justifying it with 2 reasons, while the questions asks for one reason.
Can one of our scholars provide guidance ?