A Measure of the Ability of an Entity to Pay

question 39

Multiple Choice

A measure of the ability of an entity to pay all of its current liabilities if they came due immediately is the:

• A)debt ratio.
• B)quick ratio.
• C)liquidity ratio.
• D)accounts receivable turnover.

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Definitions:

Arbitrage

A trading strategy that exploits price differences of identical or similar financial instruments on different markets or in different forms.

Derivatives Market

A market where financial instruments derived from other assets are bought and sold.

Stock Exchanges

Marketplaces where stocks and other securities are bought and sold, functioning as a platform for companies to raise capital and for investors to trade.

NASDAQ

An international e-marketplace dedicated to the buying and selling of securities, which also acts as the benchmark for U.S. tech stocks.