Multiple choice

1) Another name for the acid test ratio is the: 

A. current ratio. 

B. quick ratio. 

C. inventory turnover ratio. 

D. average collection period. 

2) Which of the following financial ratios is the best measure of the operating effectiveness of a firm's management? 

A. Current ratio 

B. Gross profit margin 

C. Quick ratio 

D. Return on investment

3. Which of the following statements about exchange rates is true? 

A. Exchange rates were fixed prior to establishing a floating-rate international currency system, and all countries set a specific parity rate for their currency relative either to the Canadian or to the U.S. dollar. 

B. Day-to-day fluctuations in exchange rates currently are caused by changes in parity rates. 

C. A floating-rate international currency system has been operating since 1973. 

D. All of the choices. 

4. Capital markets in foreign countries: 

A. offer lower returns than those obtainable in the domestic capital markets. 

B. provide international diversification. 

C. in general are becoming less integrated due to the widespread availability of interest rate and currency swaps. 

D. all of the choices.