The Ratios That Measure the Degree of Risk Associated with Borrowing

question 40

Multiple Choice

The ratios that measure the degree of risk associated with borrowing money from outsiders to finance the business are the:

• A) liquidity ratios.
• B) investment ratios.
• C) gearing ratios.
• D) efficiency ratios.

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Definitions:

Thermometer

An instrument, either electronic or disposable, that is used to measure body temperature.

Oral Temperature

Body temperature measured by a thermometer placed in the mouth, reflecting the core body temperature.

Pulse Points

Specific locations on the body where arterial pulsations can be felt, such as the wrists, neck, and ankles, useful for assessing heart rate and circulation.

Inner Wrist

The medial aspect of the wrist, which includes the area where the wrist bones and the tendons of the forearm meet.