Question

What is solvency, and how does it relate to the safety of fixed deposits?

a.

Solvency is the capacity of a company to pay its debts, and greater solvency indicates a higher risk for investors.

b.

Solvency is the financial strength of a company, and greater solvency indicates a higher risk for investors.

c.

Solvency is the net worth of a company, and greater solvency indicates a lower risk for investors.

d.

Solvency is the financial capacity of a company to pay its debts, and greater solvency indicates a lower risk for investors.

Posted under IC 89 Management Accounting

Answer: (d).Solvency is the financial capacity of a company to pay its debts, and greater solvency indicates a lower risk for investors. Explanation:Solvency is the financial capacity of a company to pay its debts, and greater solvency indicates a lower risk for investors.

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Q. What is solvency, and how does it relate to the safety of fixed deposits?
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