Describes the financial concept of debt serviceability

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Reference no: EM131995392

1. What best describes the financial concept of debt serviceability?

A. The ability to pay interest expense during the year.

B. The ability to pay long-term debt as it becomes due.

C. The ability to sell inventory.

D. The ability to satisfy short term obligations.

2. Suppose that the spot rate on the Euro is $1.35 and the 180 day forward rate is $1.40. The difference between the spot and forward rates suggests that

A. interest rates are higher in the U.S. than in the Euro zone

B. the Euro has risen in relation to the dollar

C. the inflation rate in the Euro zone has been declining

D. the Euro is expected to fall in value relative to the dollar

Reference no: EM131995392

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