THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION

question 278

Multiple Choice

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:
The probability that interest rates on housing loans will go up in the next 6 months is estimated to be 0.20.The probability that house sales will decrease is estimated to be 0.6.The probability that interest rates will go up and house sales will decrease is estimated to be 0.15.
-The probability that house sales will go down given that interest rates will go up is:

• A)0.95
• B)0.90
• C)0.75
• D)0.80

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Definitions:

Liquidity

A measure of how quickly and easily an asset can be converted into cash without significantly affecting its price.

Average Collection Period

The average number of days it takes for a business to receive payments owed by its customers for sales made on credit.

Charge Customer

The process of recording or billing a customer for goods sold or services rendered, reflecting an obligation for payment.

Acid Test Ratio

A financial metric that measures a company's ability to pay off its current liabilities with quick assets, such as cash, marketable securities, and accounts receivable, without selling inventory.