Which of the Following Statements About Financial Statements Is Incorrect

question 86

Multiple Choice

Which of the following statements about financial statements is incorrect?

• A) The net margin ratio is a profitability ratio.
• B) The current ratio is a liquidity ratio.
• C) The debt to assets ratio is a liquidity ratio.
• D) The dividend yield is a stock market ratio.

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Definitions:

TIPS

Treasury Inflation-Protected Securities, a type of U.S. government bond designed to help protect investors from inflation, as the principal value adjusts with inflation.

PIKs

Short for "Payment in Kind," a type of financing or loan where the borrower can pay interest or dividends with additional securities instead of cash.

Mortgage Bond

A type of bond secured by a mortgage on one or more assets, offering the bondholder a claim against the assets in case of default.

Securities

Financial instruments that represent an ownership position in a corporation (stocks), a creditor relationship with a governmental body or a corporation (bonds), or rights to ownership as represented by an option.