Which of the Following Cash Flow Ratios Is Used to Determine

question 52

Multiple Choice

Which of the following cash flow ratios is used to determine an entity's solvency?

• A) Debt coverage ratio.
• B) Free cash flow ratio.
• C) Cash adequacy ratio.
• D) Cash flow ratio.

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Definitions:

Management Fee

A fee charged by fund managers for managing the investments within a fund, typically expressed as a percentage of assets under management.

Treasury Bonds

Long-term government debt securities with a fixed interest rate, issued by the U.S. Treasury.

Relative Value Strategy

An investment strategy that seeks to identify and exploit differences in the prices of related financial instruments, such as stocks and bonds, for potential profit.