If You Are Handed a Formal Summary of a Security

question 46

Multiple Choice

If you are handed a formal summary of a security that describes the costs, investment objectives, and risks involved, what are you reading?

• A)Annual report
• B)Prospectus
• C)Auditor report
• D)Proxy statement

Calculate the acid-test ratio based on given financial information.

Understand the function and calculation of the gross margin ratio.

Differentiate between the acid-test ratio and current ratio.

Distinguish between merchandise inventory as a current asset and its presentation in financial statements.

---

Definitions:

Arachnoid

The middle of the three meningeal layers that cover and protect the brain and spinal cord; see pia mater and dura mater.

Procedural Memory

A type of long-term memory that is responsible for knowing how to perform certain tasks without conscious awareness of the learning process.

Limbic System

A complex system of nerves and networks in the brain, involving several areas near the edge of the cortex and within the forebrain, responsible for the control of basic emotions and drives.

Motivation

The process that initiates, guides, and maintains goal-oriented behaviors. It is the driving force behind human actions.