Question: A firm has a higher quick (or acid test) ratio than the industry average, which implies: A) the firm has a higher P/E ratio than

A firm has a higher quick (or acid test) ratio than the industry average, which implies:

A) the firm has a higher P/E ratio than other firms do in the industry.

B) the firm is more likely to avoid insolvency in the short run than other firms in the industry are.

C) the firm may be less profitable than other firms in the industry.

D) the firm has a higher P/E ratio than other firms do in the industry and the firm is more likely to avoid insolvency in the short run than other firms in the industry are.

E) the firm is more likely to avoid insolvency in the short run than other firms in the industry are and the firm may be less profitable than other firms in the industry.

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