Total Assets on Your Balance Sheet Are $6,000 and Liabilities

question 66

Multiple Choice

Total assets on your balance sheet are $6,000 and liabilities are $2,000. Your solvency ratio will be:

• A)30%.
• B)33%.
• C)67%.
• D)85%.
• E)75%.

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Definitions:

Mitigate

To make less severe, serious, or painful; often used in the context of reducing risk or harm.

Defined Benefit Plan

A type of pension plan where the employer promises a specified pension payment upon retirement, based on an employee's earnings history, tenure of service, and age.

Defined Contribution Plan

A type of retirement plan where the amount contributed to the plan is specified, but the benefit received at retirement depends on the plan's investment performance.

Endowment Fund

A fund established by a foundation, institution, or individual, where the principal amount is kept intact while the investment income is available for use.