WGU C214 Finance Question and
answers verified to pass 2025/2026
Risk - correct answer ✔difference b/w Actual and Expected Return -The potential loss or gain of a
transaction - the UNKNOWN FACTOR.
Income statements = - correct answer ✔Money in (Sales or Revenue) MINUS Money out (expenses)
Measured over a period i.e. Jan - December
Which of the following is NOT given as an example that has experienced significant country risk over
recent years? - correct answer ✔Canada
Why would a farmer buy a hedge when he signs a contract to sell produce overseas? - correct answer
✔To reduce currency risk
If the value of the dollar increases, the price of imports_______. - correct answer ✔Decreases
If a product is made 100% domestically, what can affect its domestic market? - correct answer
✔International competition
Government funds designed to invest abroad are termed: - correct answer ✔Sovereign wealth funds
A financial product in which banks bundle international stocks so they can be sold on US exchanges in US
dollars is termed a __________. - correct answer ✔ADR
Outsourcing involves the ______ market. - correct answer ✔labor
,The purpose of currency restrictions is: - correct answer ✔to limit the ability of a foreign firm to take
capital out of a country
1. Which of the following is NOT discussed in this section as a potential cost of doing international
business. - correct answer ✔NAFTA
What is the primary motive for tariffs? - correct answer ✔to protect domestic industries
Two examples of US legislation to promote global free trade are: - correct answer ✔NAFTA; TPP
In finance jargon, what is another word that means to buy an asset? - correct answer ✔long
What type of derivative security discussed in this section allows companies to lock in an FX rate for the
future? - correct answer ✔Currency Forward and Currency Future
The general process of eliminating risk with FX is referred to as: - correct answer ✔hedging
The goal of using a financial derivate such as a forward or future is to? - correct answer ✔make no
profits through exchange rate movements
Which are two primary methods used the mitigate FX risk? - correct answer ✔Financial derivatives;
Direct investment
Value of the currency is determined by supply and demand - correct answer ✔Floating
Not controlled entirely by market demand and supply, but is partially controlled by government
intervention that limits minimum and maximum value - correct answer ✔Fixed / Pegged
,A country's monetary authority intervenes to maintain a constant value of the country's currency -
correct answer ✔Managed
The policy that allows a currency to float within a minimum and a maximum is called: - correct answer
✔Managed Floating
If a country intervenes to maintain a constant value of the country's currency, it is a ___________
exchange rate regime. - correct answer ✔Fixed/ pegged
If a country follows a floating exchange rate policy then the value of the currency is determined strictly
by: - correct answer ✔supply and demand in the open market
What does it mean if the US dollar/Canadian dollar exchange rate is 1.1? - correct answer ✔It takes 1.1
US dollars to buy 1 Canadian dollar
If Ford manufactures a vehicle in the US paying dollars and sells it in Mexico collecting pesos, if the price
in Mexico for the vehicle stays constant, but the value of the Peso depreciates against the dollar, then
Ford will make ____________ profit measured in US dollars. - correct answer ✔less
If a currency (Swiss Franc) appreciates relative to a second currency (Chinese Yuan), then the exchange
rate measured as SF/Yuan goes: - correct answer ✔down
Why would a country have incentives to devalue its currency? A weaker currency ______________. -
correct answer ✔1. makes exports relatively cheaper for foreign consumers.
makes imports relatively more expensive for domestic consumers.
in general a weaker currency can help a domestic economy.
Which of the following is the ways the Dodd Frank Act monitors capital markets? - correct answer
✔Regulate types of assets banks can hold
, Monitor insurance industry
Systematic risk analysis
Monitor hedge fund industry
parts of the Sarbanes-Oxley Act: - correct answer ✔Requires external audits of financial statements
Holds top management responsible for accurate accounting reports
Disciplines accounting firms for oversight of compliance issues
Assigns new responsibilities to board members
Who is subject to FINRA regulation? - correct answer ✔Corporations that trade in equity, bond or
futures markets that are not regulated by another self-regulatory organization
Brokerage firms
Exchange markets
None of these choices are subject to FINRA regulation
What is FINRA's primary purpose? - correct answer ✔Ensure the securities industry is fair and honest
A prospectus contains - correct answer ✔The name(s) of underwriter facilitating the offering
Detailed information about the securities offered
Audited financial statements
Price and number of shares offering will include
The "Wildcat Banking" era lead the government to regulate the banking industry in the US. Which of the
following acts was instituted in an effort to help prevent bank runs: - correct answer ✔National
Banking Act of 1863
answers verified to pass 2025/2026
Risk - correct answer ✔difference b/w Actual and Expected Return -The potential loss or gain of a
transaction - the UNKNOWN FACTOR.
Income statements = - correct answer ✔Money in (Sales or Revenue) MINUS Money out (expenses)
Measured over a period i.e. Jan - December
Which of the following is NOT given as an example that has experienced significant country risk over
recent years? - correct answer ✔Canada
Why would a farmer buy a hedge when he signs a contract to sell produce overseas? - correct answer
✔To reduce currency risk
If the value of the dollar increases, the price of imports_______. - correct answer ✔Decreases
If a product is made 100% domestically, what can affect its domestic market? - correct answer
✔International competition
Government funds designed to invest abroad are termed: - correct answer ✔Sovereign wealth funds
A financial product in which banks bundle international stocks so they can be sold on US exchanges in US
dollars is termed a __________. - correct answer ✔ADR
Outsourcing involves the ______ market. - correct answer ✔labor
,The purpose of currency restrictions is: - correct answer ✔to limit the ability of a foreign firm to take
capital out of a country
1. Which of the following is NOT discussed in this section as a potential cost of doing international
business. - correct answer ✔NAFTA
What is the primary motive for tariffs? - correct answer ✔to protect domestic industries
Two examples of US legislation to promote global free trade are: - correct answer ✔NAFTA; TPP
In finance jargon, what is another word that means to buy an asset? - correct answer ✔long
What type of derivative security discussed in this section allows companies to lock in an FX rate for the
future? - correct answer ✔Currency Forward and Currency Future
The general process of eliminating risk with FX is referred to as: - correct answer ✔hedging
The goal of using a financial derivate such as a forward or future is to? - correct answer ✔make no
profits through exchange rate movements
Which are two primary methods used the mitigate FX risk? - correct answer ✔Financial derivatives;
Direct investment
Value of the currency is determined by supply and demand - correct answer ✔Floating
Not controlled entirely by market demand and supply, but is partially controlled by government
intervention that limits minimum and maximum value - correct answer ✔Fixed / Pegged
,A country's monetary authority intervenes to maintain a constant value of the country's currency -
correct answer ✔Managed
The policy that allows a currency to float within a minimum and a maximum is called: - correct answer
✔Managed Floating
If a country intervenes to maintain a constant value of the country's currency, it is a ___________
exchange rate regime. - correct answer ✔Fixed/ pegged
If a country follows a floating exchange rate policy then the value of the currency is determined strictly
by: - correct answer ✔supply and demand in the open market
What does it mean if the US dollar/Canadian dollar exchange rate is 1.1? - correct answer ✔It takes 1.1
US dollars to buy 1 Canadian dollar
If Ford manufactures a vehicle in the US paying dollars and sells it in Mexico collecting pesos, if the price
in Mexico for the vehicle stays constant, but the value of the Peso depreciates against the dollar, then
Ford will make ____________ profit measured in US dollars. - correct answer ✔less
If a currency (Swiss Franc) appreciates relative to a second currency (Chinese Yuan), then the exchange
rate measured as SF/Yuan goes: - correct answer ✔down
Why would a country have incentives to devalue its currency? A weaker currency ______________. -
correct answer ✔1. makes exports relatively cheaper for foreign consumers.
makes imports relatively more expensive for domestic consumers.
in general a weaker currency can help a domestic economy.
Which of the following is the ways the Dodd Frank Act monitors capital markets? - correct answer
✔Regulate types of assets banks can hold
, Monitor insurance industry
Systematic risk analysis
Monitor hedge fund industry
parts of the Sarbanes-Oxley Act: - correct answer ✔Requires external audits of financial statements
Holds top management responsible for accurate accounting reports
Disciplines accounting firms for oversight of compliance issues
Assigns new responsibilities to board members
Who is subject to FINRA regulation? - correct answer ✔Corporations that trade in equity, bond or
futures markets that are not regulated by another self-regulatory organization
Brokerage firms
Exchange markets
None of these choices are subject to FINRA regulation
What is FINRA's primary purpose? - correct answer ✔Ensure the securities industry is fair and honest
A prospectus contains - correct answer ✔The name(s) of underwriter facilitating the offering
Detailed information about the securities offered
Audited financial statements
Price and number of shares offering will include
The "Wildcat Banking" era lead the government to regulate the banking industry in the US. Which of the
following acts was instituted in an effort to help prevent bank runs: - correct answer ✔National
Banking Act of 1863
