The Current Assets of Global Acorn Are Valued at 25

question 82

Multiple Choice

The current assets of Global Acorn are valued at 25 million dollars and its current liabilities are at 6 million dollars. If its inventory is worth 1 million dollars, what is its quick ratio?

• A) 4
• B) 0.25
• C) 0.14
• D) 3.6

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Definitions:

Total Risk

The overall risk associated with an investment, including both systematic and unsystematic risks.

Market Risk

The potential for a loss faced by an investor, which is attributed to elements that influence the total performance of the financial markets.

Firm-specific Risk

The portion of a company's risk that is attributable to its own operations and environment, as opposed to market-wide risk.

Risk-free Asset

An investment with a guaranteed return and no risk of financial loss, often exemplified by government bonds.