Question: 1. Why is the quick ratio considered by some to be a better measure of liquidity than the current ratio? (a) The quick ratio more

1.

Why is the quick ratio considered by some to be a better measure of liquidity than the current ratio?

(a)

The quick ratio more accurately reflects a firm's profitability.
(b)

It omits the least liquid current asset from the numerator of the ratio.
(c)

The current ratio does not include accounts receivable.
(d)

It measures how "quickly" cash flows through the firm.

2.

The true cost of lending is the:

(a)

annual percentage rate.
(b)

effective annual rate.
(c)

quoted interest rate.
(d)

interest rate per period.

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