Which of the Following Ratios Is a Liquidity Ratio

question 76

Multiple Choice

Which of the following ratios is a liquidity ratio?

• A) inventory turnover ratio
• B) acid-test ratio
• C) debt to owners' equity ratio
• D) basic earnings per share

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Definitions:

Legally Binding

An agreement or contract that is enforceable by law.

Coupon Bonds

Debt securities that pay the holder a fixed interest rate (coupon) over a specified period until maturity, at which point the principal amount is repaid.

Interest Rate Sensitive

Refers to investments or financial instruments that are significantly impacted by changes in interest rates.

Yield To Maturity

The total return anticipated on a bond if held until it matures, factoring in current market price, par value, coupon interest rate, and time to maturity.