D076 - OA test Prep Questions with
complete solution 2025/2026
What are long-term financial forecasts
used for? D. Making investment and
financing decisions
A. Developing savings, income, and
expense strategies Correct! Whatever growth a firm
B. Determining short-term operating an- ticipates must eventually be
needs financed one way or another.
C. Cash budgeting Any investment in capital that
D. Making investment and financing exceeds what the firm retains
decisions from profit generates a discre-
tionary financing need.
2. What does a net margin of 7% indicate? D. For every dollar of revenue, 7
cents remain for the equity
A. For every dollar of revenue, 7 cents holders after all other costs are
remain for the debt holders and equity covered.
holders after all other costs are covered.
B. For every dollar of total assets, 7 Correct! Net margin tells us the
cents are generated as sales. per- centage of sales that will
C. For every dollar of fixed assets, 7 become net income, which is the
cents are generated in sales. amount remain- ing for the
D. For every dollar of revenue, 7 cents equity holders.
remain for the equity holders after all
other costs are covered.
3. Which area of finance involves deciding
which assets to invest in to create
wealth in the fu- ture? D. Investments
A. Financial management Correct! This area involves
B. Asset pricing deciding which assets to invest in
C. Financial institutions to create wealth in the future.
D. Investments
,4.
, D076 - OA test Prep
What is the main goal of a firm? C. To maximize owner wealth
A. To make investment decisions Correct! The main goal of a
B. To circulate money in the firm is to maximize owner wealth,
economy
and the
C. To maximize owner wealth
financial manager should make deci-
D. To make decisions on how to finance projects sions based on this
goal.
5. What are financial managers doing if they eval- C. Making an investment
decision
uate whether it is worth spending money on
research and development for a new Correct! The financial manager
product? as- sesses the costs and
benefits of po- tential
A. Managing working capital
investments in order to wisely
B. Making a financing decision use the investors' money.
C. Making an investment decision
D. Implementing a financial policy
6. Which type of financial market is where securi- B. The secondary financial
market
ties such as stocks and bonds are traded after
their initial issuance? A. Depository
B. Investment
A. The initial public offering C. Contractual
B. The secondary financial market D. Circulatory
C. The primary financial market
D. The dealer market
7. What type of financial institution is an
insur- ance company?
, Correct! Financial securities are first sold in the primary
financial market and then traded among investors in the C. Contractual
secondary financial market.
Correct! Insurance companies are
contractual savings institutions.
complete solution 2025/2026
What are long-term financial forecasts
used for? D. Making investment and
financing decisions
A. Developing savings, income, and
expense strategies Correct! Whatever growth a firm
B. Determining short-term operating an- ticipates must eventually be
needs financed one way or another.
C. Cash budgeting Any investment in capital that
D. Making investment and financing exceeds what the firm retains
decisions from profit generates a discre-
tionary financing need.
2. What does a net margin of 7% indicate? D. For every dollar of revenue, 7
cents remain for the equity
A. For every dollar of revenue, 7 cents holders after all other costs are
remain for the debt holders and equity covered.
holders after all other costs are covered.
B. For every dollar of total assets, 7 Correct! Net margin tells us the
cents are generated as sales. per- centage of sales that will
C. For every dollar of fixed assets, 7 become net income, which is the
cents are generated in sales. amount remain- ing for the
D. For every dollar of revenue, 7 cents equity holders.
remain for the equity holders after all
other costs are covered.
3. Which area of finance involves deciding
which assets to invest in to create
wealth in the fu- ture? D. Investments
A. Financial management Correct! This area involves
B. Asset pricing deciding which assets to invest in
C. Financial institutions to create wealth in the future.
D. Investments
,4.
, D076 - OA test Prep
What is the main goal of a firm? C. To maximize owner wealth
A. To make investment decisions Correct! The main goal of a
B. To circulate money in the firm is to maximize owner wealth,
economy
and the
C. To maximize owner wealth
financial manager should make deci-
D. To make decisions on how to finance projects sions based on this
goal.
5. What are financial managers doing if they eval- C. Making an investment
decision
uate whether it is worth spending money on
research and development for a new Correct! The financial manager
product? as- sesses the costs and
benefits of po- tential
A. Managing working capital
investments in order to wisely
B. Making a financing decision use the investors' money.
C. Making an investment decision
D. Implementing a financial policy
6. Which type of financial market is where securi- B. The secondary financial
market
ties such as stocks and bonds are traded after
their initial issuance? A. Depository
B. Investment
A. The initial public offering C. Contractual
B. The secondary financial market D. Circulatory
C. The primary financial market
D. The dealer market
7. What type of financial institution is an
insur- ance company?
, Correct! Financial securities are first sold in the primary
financial market and then traded among investors in the C. Contractual
secondary financial market.
Correct! Insurance companies are
contractual savings institutions.
