WGU FINANCIAL MGMT EXAM 142 QUESTIONS
WITH VERIFIED ANSWERS 2025/2026
A financial asset or the value of an asset. Examples are Cash, EQ, Machinery. -
CORRECT ANSWER Capital
Corporate Finance, Investments, Banking/Financial institution - CORRECT ANSWER
Three Important Areas in Finance
Focuses on financial decision making by a firm's management. The finance
function within a business. - CORRECT ANSWER Corporate Finance
the action or process of investing money for profit or material result. Devoted to
understanding various types of financial instruments. - CORRECT ANSWER
Investments
Money lent by a creditor to provide financing for the borrower. Also called Bonds.
- CORRECT ANSWER Debt
Ownership in an asset such as a company. Also called stock. - CORRECT ANSWER
Equity
Provide funding for a person or enterprise. - CORRECT ANSWER Finance
,the process of planning and managing a firm's long-term investments. - CORRECT
ANSWER Capital Budgeting
True - CORRECT ANSWER Finance is a subfield of economics.
Financial Markets. - CORRECT ANSWER Which of the following is not an example
of firm capital?
Cash
Machinery
Labor
Financial markets
When interest rates they charge to borrowers are MORE than interest rates they
pay depositors. - CORRECT ANSWER When do banks make money?
Stocks and Bonds - CORRECT ANSWER Two types of financial instruments?
Debt instrument (bonds) issued by the U.S. government to pay for the national
debt (to raise capital) - CORRECT ANSWER Treasury Securities
A debt instrument that is issued by a corporation in order to raise capital. -
CORRECT ANSWER Corporate Bonds
An equity instrument. A share of ownership in a corporation. - CORRECT ANSWER
Stock
, A financial security that represents a promise to repay a fixed amount of funds.
Similar to a loan. - CORRECT ANSWER Bond
Costs that are incurred when management doesn't act in the best interests of
shareholders. Costs that result from principle agent problem. - CORRECT ANSWER
Agency Costs
Compensating management with company stock. - CORRECT ANSWER How to
mitigate Agency Costs
Agency costs and potential unethical behavior - CORRECT ANSWER What issue(s)
are associated with the firm goal to maximize shareholder value?
-Employing additional workers.
-Creating growth and leading to increased production by other firms.
-Increasing the profitability of other firms because of increased consumption. -
CORRECT ANSWER Maximizing shareholder value ethically can improve society
generally by:
-A firm's decision to invest in a project because management enjoys working on
the project.
-Management spending company money on unprofitable goods and services. -
CORRECT ANSWER Examples of Agency Costs:
WITH VERIFIED ANSWERS 2025/2026
A financial asset or the value of an asset. Examples are Cash, EQ, Machinery. -
CORRECT ANSWER Capital
Corporate Finance, Investments, Banking/Financial institution - CORRECT ANSWER
Three Important Areas in Finance
Focuses on financial decision making by a firm's management. The finance
function within a business. - CORRECT ANSWER Corporate Finance
the action or process of investing money for profit or material result. Devoted to
understanding various types of financial instruments. - CORRECT ANSWER
Investments
Money lent by a creditor to provide financing for the borrower. Also called Bonds.
- CORRECT ANSWER Debt
Ownership in an asset such as a company. Also called stock. - CORRECT ANSWER
Equity
Provide funding for a person or enterprise. - CORRECT ANSWER Finance
,the process of planning and managing a firm's long-term investments. - CORRECT
ANSWER Capital Budgeting
True - CORRECT ANSWER Finance is a subfield of economics.
Financial Markets. - CORRECT ANSWER Which of the following is not an example
of firm capital?
Cash
Machinery
Labor
Financial markets
When interest rates they charge to borrowers are MORE than interest rates they
pay depositors. - CORRECT ANSWER When do banks make money?
Stocks and Bonds - CORRECT ANSWER Two types of financial instruments?
Debt instrument (bonds) issued by the U.S. government to pay for the national
debt (to raise capital) - CORRECT ANSWER Treasury Securities
A debt instrument that is issued by a corporation in order to raise capital. -
CORRECT ANSWER Corporate Bonds
An equity instrument. A share of ownership in a corporation. - CORRECT ANSWER
Stock
, A financial security that represents a promise to repay a fixed amount of funds.
Similar to a loan. - CORRECT ANSWER Bond
Costs that are incurred when management doesn't act in the best interests of
shareholders. Costs that result from principle agent problem. - CORRECT ANSWER
Agency Costs
Compensating management with company stock. - CORRECT ANSWER How to
mitigate Agency Costs
Agency costs and potential unethical behavior - CORRECT ANSWER What issue(s)
are associated with the firm goal to maximize shareholder value?
-Employing additional workers.
-Creating growth and leading to increased production by other firms.
-Increasing the profitability of other firms because of increased consumption. -
CORRECT ANSWER Maximizing shareholder value ethically can improve society
generally by:
-A firm's decision to invest in a project because management enjoys working on
the project.
-Management spending company money on unprofitable goods and services. -
CORRECT ANSWER Examples of Agency Costs:
