The Prime Rate Is

question 21

Multiple Choice

The prime rate is:

• A) the highest rate of interest charged on business loans to the best business borrowers by the nation's leading banks' premium rate
• B) the lowest rate of interest charged on business loans to the best business borrowers by the nation's leading banks.
• C) the average rate of interest charged on business loans to the best business borrowers by the nation's leading banks.
• D) the treasury bill rate

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Definitions:

Total Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets to generate sales revenue.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, representing the owners' claim on the company's assets.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its short-term assets, calculated as current assets divided by current liabilities.

Inventory Turnover

A measure of how many times a company's inventory is sold and replaced over a period.