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To determine the liquidity ratio, you first need to know the formula for calculating it, which is generally represented as:

**Liquidity Ratio = (Cash and Cash Equivalents) / Total Monthly Expenses.**

In this scenario, the client’s monthly income is $10,000 and her expenses are $8,000. If we are given the total amount in her savings and checking accounts as cash and cash equivalents, we can calculate the liquidity ratio based on that number.

To arrive at the correct answer, you need to know that a liquidity ratio of 1.5 suggests that, for every dollar of expenses (which is $8,000), the client has $12,000 in cash and cash equivalents. When you perform the calculation:

1. Start with the monthly expenses of $8,000.

2. Multiply that by 1.5 to find the required cash amount, which gives you $12,000 total in cash and cash equivalents.

3. This means the liquidity ratio means she can cover her expenses for 1.5 months without needing any additional income.

In summary, a liquidity ratio of 1.5 indicates a healthy liquidity position, demonstrating that the client can easily meet her obligations with her available cash and cash