Which of the Following Statements Is an Accurate Interpretation of the Current

question 60

Multiple Choice

Which of the following statements is an accurate interpretation of the current ratio?

• A)A current ratio of 1.5 or higher is considered a high-risk ratio.
• B)A current ratio below 1.00 is considered a good and safe ratio.
• C)A current ratio of 2.0 indicates strong ability to pay current liabilities.
• D)A current ratio of 0.60 or lower is a good and safe ratio.

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Definitions:

Insurance

A financial product that transfers the risk of financial loss from an individual or entity to an insurance company in exchange for premium payments.

Treasury Bond

A Treasury bond is a long-term, fixed-interest government debt security issued by the U.S. Treasury Department with a maturity of more than 10 years.

Singapore

An island city-state in Southeast Asia, known for its strong economy, diverse culture, and strict regulations.