The 'Current Ratio' Is Usually Calculated As

question 18

Multiple Choice

The 'current ratio' is usually calculated as:

• A) current assets minus goodwill ÷ current liabilities
• B) current assets ÷ current liabilities
• C) current assets excluding inventory ÷ current liabilities
• D) current liabilities ÷ current assets

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Definitions:

Mortgage Trusts

Investment funds or trusts that pool investments in mortgage loans or mortgage-backed securities.

Construction Loans

Short-term loans provided to finance the building or renovation of a property, typically requiring interest-only payments during construction and full repayment upon completion.

Average Maturity

The weighted average of all the maturities of the bonds in a portfolio, reflecting the portfolio's sensitivity to interest rate changes.

Money Market Mutual Fund

A type of mutual fund investing in short-term debt securities, offering investors high liquidity with a relatively low level of risk.