An Example of a Liquidity Ratio Is the

question 1

Multiple Choice

An example of a liquidity ratio is the

• A)quick ratio.
• B)debt ratio.
• C)interest coverage ratio.
• D)return on assets.

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Definitions:

Inflation Risk

The likelihood that the value of assets or income will decrease as inflation shrinks the purchasing power of a currency.

Term Structure

The relationship between interest rates or bond yields and different terms to maturity, typically depicted in a yield curve.

Liquidity Premium

The portion of a nominal interest rate or bond yield that represents compensation for lack of liquidity.

Inflation

An indicator of how quickly the overall price level for goods and services increases, leading to a decrease in buying power.