13-82 Which of the Following Ratios Do FIs and Regulators

question 99

Multiple Choice

13-82 Which of the following ratios do FIs and regulators often use as a simple measure of solvency?

• A)Current ratio.
• B)Capital to assets.
• C)Earnings before interest and taxes to total assets.
• D)Quick ratio.
• E)Asset turnover ratio.

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Definitions:

Consequential

Relating to consequences or effects, particularly in the context of damages in contracts, where it refers to losses arising as a result of a breach.

Punitive

Intended as punishment, often referring to damages awarded in a lawsuit intended to reform or deter the defendant and similar parties from engaging in conduct similar to that which formed the basis of the lawsuit.

Breach of Contract

The failure to fulfill one's obligations as agreed upon in a contract, allowing for legal action by the aggrieved party.

Primary Benefit Test

A legal doctrine used to determine who is the primary beneficiary of a service or transaction, often influencing the decision on liability or responsibility under the law.