A High Debt-To-Equity Ratio Indicates That the Firm Is Relying

question 160

True/False

A high debt-to-equity ratio indicates that the firm is relying heavily on debt, or is "highly leveraged."

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Definitions:

Government Securities

Financial instruments issued by the government to finance its expenditures, offering a return to the investors.

Banking System

The network of institutions that accept deposits, offer loans, and provide a variety of financial services to their customers, including savings and checking accounts.

Paper Money

Currency in the form of paper notes, issued by the government or central bank, representing a claim on the issuing country's government.

Gold

A precious metal that is used as an investment, a hedge against inflation, and in various industrial and jewelry applications, known for its value retention over time.