Kim Has a Net Worth of -$20 000 and a Debt-To-Asset

question 47

Multiple Choice

Kim has a net worth of -$20 000 and a debt-to-asset ratio of three.Which of the following do you know is True?

• A)Kim has a major liquidity problem.
• B)Kim is on the verge of bankruptcy.
• C)Kim has assets of $10 000.
• D)Kim has liabilities of $20 000.

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Definitions:

Financial

Relating to money or how money is managed.

Illiquid

Describes an asset or security that cannot easily be sold or exchanged for cash without a substantial loss in value.

Real Assets

Physical or tangible assets such as gold, real estate, and commodities, which have intrinsic value due to their substance and physical properties.

Asset Allocation

The allocation of investment portfolio across various asset classes, such as stocks, bonds, and cash, to achieve a specific investment goal.