A Corporation Reports the Following Year-End Balance Sheet Data A)058
B)1

question 93

Multiple Choice

A corporation reports the following year-end balance sheet data.The company's debt ratio equals: $$\begin{array} { l r l r r } \text { Cash } & \$ 40,000 & \text { Current liabilities } & \$ 5,000 \\\text { Accourts receivable } & 55,000 & \text { Long-temn liabilities } & 35,000 \\\text { Irventory } & 60,000 & \text { Cormon stock } & 100,000 \\\text { Equiprment } & \underline{145,000} & \text { Retaired earnirgs } & \underline{90,000} \\\text { Total assets } & \underline{\$ 300,000} & \text { Total liabilities ard equity } & \underline{\$ 300,000}\end{array}$$

• A)0.58
• B)1.27
• C)2.07
• D)0.37
• E)0.63

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Definitions:

Behavioral Finance

An area of study focusing on how psychological influences and biases affect the financial behaviors of investors and financial markets.

Rational

Characterized by clear, logical thinking, often referring to decision-making that maximizes benefit.

Irrational

Acting without reason or understanding, often defying logical or expected behavior, particularly in economic contexts referring to market participants.

Weak-form Efficient

A form of market efficiency that asserts all past trading information is fully reflected in stock prices, and thus, technical analysis cannot consistently produce excess returns.