5. The current real rate is the current interest rate minus the current (or latest past) inflation rate, while the real rate (without the word current) is the current interest rate minus the expected future inflation rate over the life of the security. *

True

False

4. Excess inventory level will increase the current ratio and the liquidity of the company *

True

False

3. In risk-free environment, lower debt ratios always indicate good debt management. *

True

False

2. If the liquidity, asset management, debt management, and profitability ratios all look bad and if investors think these ratios will continue to look bad in the future, the market value ratios will be high, the stock price will be as low as can be expected, and management will be judged to have been doing a bad job. *

True

False