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QuizMultiple Choice

Bank Financial Statements and Performance

Question 1 • (AG Q4) Financial Literacy: 25-26 (JRush)

The closer a bank’s liquidity coverage ratio is to 50 percent, the more solvent the bank is said to be.

Answer
A
True
B
False

Explanation

The liquidity coverage ratio measures whether a bank has enough high-quality liquid assets to cover expected net cash outflows over 30 days. A higher ratio generally indicates a stronger short-term liquidity position; being closer to 50 percent does not mean the bank is more solvent. The statement is false.

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