The Current Ratio Is

question 139

Multiple Choice

The current ratio is

• A) current assets plus current liabilities.
• B) current assets minus current liabilities.
• C) current assets divided by current liabilities.
• D) current assets multiplied by current liabilities.

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Definitions:

Equal Magnitude

A term used to describe quantities or values that are the same in size, amount, or degree.

Pure Yield Pickup Swap

A strategy where an investor moves into higher-yielding securities, trading off shorter-duration or lower-quality bonds for higher yield, assuming additional risk.

Longer-Duration Bonds

Fixed-income securities with extended time frames to maturity, typically exposing investors to higher interest rate risk but potentially offering higher yields.

Shorter-Duration Bonds

Bonds with a near-term maturity date, typically less sensitive to interest rate changes and offering less yield compared to longer-duration bonds.