QBank Question 97118 mistakes, states, wrong

leadcfa

Answer states:
“Leverage increased as measured by the debttoequity ratio from 2.25 in 2005 to 3.68 in 2007”
Isn’t leverage the assettoequity ratio? Is the QBank wrong again? I feel like I’ve been catching alot of mistakes lately.

siavosh

Ok. When they talk about leverage on the exam, what are they referring to? A/E is in ROE but D/E is in the example above.

Makavelim3

If you use A/E on that QBank question you would have gotten the incorrect answer. That is the only problem I have with that question.

joehogue

Probably for Level 1, we just strictly adhere Financial Leverage as A/E while Leverage as D/E.