A Strong Liquidity Position Means That

question 127

Multiple Choice

A strong liquidity position means that

• A) the firm is able to meet its short-term obligations.
• B) the firm uses little debt in its capital structure.
• C) the firm pays out a large portion of its net income in the form of dividends.
• D) the firm pays its creditors on time.

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Definitions:

Crater

A bowl-shaped cavity on the surface of a planet, moon, or asteroid, typically caused by the impact of a meteorite.

Ratification

The act of approving or sanctioning an agreement or treaty that makes it officially valid.

Unauthorized Act

An action taken by an individual or entity without permission or authority, potentially leading to legal consequences or invalidation of the act.

Principal

In finance, this term refers to the original sum of money borrowed in a loan, or the amount of the investment itself, excluding any interest or profit.