The Interest Earned on an Individual's _____ Is Free of State

question 24

Multiple Choice

The interest earned on an individual's _____ is free of state and local income taxes.

• A)Series EE bonds
• B)certificates of deposit
• C)term deposits
• D)money market deposit accounts
• E)time deposits

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Definitions:

Liquidity

The ease with which assets can be converted into cash without significantly affecting their value.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its current assets over current liabilities.

Acid Test Ratio

A financial metric that assesses a company's ability to pay off its short-term liabilities with its quick assets (cash, marketable securities, and receivables).

Current Assets

Assets that are expected to be converted into cash within one fiscal year or one operating cycle, whichever is longer.