When a Financially Distressed Firm Is Experiencing Technical Insolvency

question 103

Multiple Choice

When a financially distressed firm is experiencing technical insolvency,

• A) it has a negative net worth.
• B) it cannot sell its assets.
• C) it cannot meet its obligations as they come due.
• D) more than one of the above are true

---

Definitions:

Terms of Trade

The ratio at which a country's exports exchange for its imports, influencing the country's economic health.

U.S. Dollar

The official currency of the United States, widely used as a benchmark in international trade and financial transactions.

Real Interest Rates

The interest rate modified to account for inflation, indicating the actual cost of borrowing and the genuine return for investors.

Appreciate

To increase in value or worth over time, commonly used in financial contexts.