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Question: The current ratio measures the ________ position of an insurance policy.

Options:

  1.  Solvency
  2.  Liquidity
  3.  Profitability
  4.  Activity

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2. Liquidity

The current ratio measures the Liquidity position of an insurance policy.


More information:

Liquidity is the company's ability to convert assets into cash without significant change in its market value to raise money in the time of needs.

Types of liquidity:

  • Market liquidity
  • Accounting liquidity.

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