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The all-important ROE ratio is lower for Allied than for the industry; shareholders are not going to be happy. But notice that Allied’s ROE is closer, in relative terms, to the average than one would expect from looking at the difference in ROA between Allied and the industry: Allied’s ROE/industry ROE = 12.5/15.0 = .833; Allied’s ROA/industry ROA = 5.9/9.0 = .656. How was Allied able to close the gap? And do you approve of their strategy?

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