WGU D775 Introduction to Business
Finance Questions and Answers
(2026/2027) | Updated Review | A+
Verified
• Capital raising -✓✓Securing funding for business operations and projects.
• Money management activity -✓✓Involves the creation, circulation, and
management of money.
• Common stock -✓✓A share of ownership in a firm with voting rights.
• Preferred stock characteristic -✓✓Fixed dividends.
• Purpose of bonds for issuers -✓✓To raise capital without diluting ownership.
• Junk bonds -✓✓Speculative bonds.
• Options in financial derivatives -✓✓They give the buyer the right, but not the
obligation, to buy or sell an asset.
• Economies of scale for funds -✓✓By making large-scale investments that reduce
transaction costs.
• Initial public offering (IPO) -✓✓The first sale of a company's stock to the public.
• Secondary market activity -✓✓The trading of stocks on the New York Stock
Exchange.
• Types of financial markets -✓✓Primary markets and secondary markets.
• Role of financial regulators -✓✓Ensuring fair and transparent markets.
• Depository institutions -✓✓Institutions that accept deposits and provide loans.
, • Primary source of revenue for depository institutions -✓✓Interest income from
loans.
• Rising Consumer Price Index (CPI) effect -✓✓It indicates increased costs for
raw materials and labor.
• Return on equity goals -✓✓Beating their return on equity goals for each quarter
• Environmental, social, and governance (ESG) criteria -✓✓Impact of integrating
ESG criteria into investment decisions
• Long-term risks -✓✓Seeking long-term risks to protect stakeholders
• Financial ratios for investors -✓✓Purpose of using financial ratios for investors
• Standardized basis for performance evaluation -✓✓How financial ratios help in
comparing companies
• Performance benchmarking -✓✓How financial ratios aid in performance
benchmarking
• Profitability ratios -✓✓What do profitability ratios indicate?
• Current ratio -✓✓What does the current ratio evaluate?
• High average collection period -✓✓What does a high average collection period
indicate?
• High current ratio -✓✓What does a high current ratio suggest about a company's
financial health?
• High accounts receivable turnover rate -✓✓What does a high accounts
receivable turnover rate indicate?
• High debt-to-assets ratio -✓✓What does a high debt-to-assets ratio suggest?
Finance Questions and Answers
(2026/2027) | Updated Review | A+
Verified
• Capital raising -✓✓Securing funding for business operations and projects.
• Money management activity -✓✓Involves the creation, circulation, and
management of money.
• Common stock -✓✓A share of ownership in a firm with voting rights.
• Preferred stock characteristic -✓✓Fixed dividends.
• Purpose of bonds for issuers -✓✓To raise capital without diluting ownership.
• Junk bonds -✓✓Speculative bonds.
• Options in financial derivatives -✓✓They give the buyer the right, but not the
obligation, to buy or sell an asset.
• Economies of scale for funds -✓✓By making large-scale investments that reduce
transaction costs.
• Initial public offering (IPO) -✓✓The first sale of a company's stock to the public.
• Secondary market activity -✓✓The trading of stocks on the New York Stock
Exchange.
• Types of financial markets -✓✓Primary markets and secondary markets.
• Role of financial regulators -✓✓Ensuring fair and transparent markets.
• Depository institutions -✓✓Institutions that accept deposits and provide loans.
, • Primary source of revenue for depository institutions -✓✓Interest income from
loans.
• Rising Consumer Price Index (CPI) effect -✓✓It indicates increased costs for
raw materials and labor.
• Return on equity goals -✓✓Beating their return on equity goals for each quarter
• Environmental, social, and governance (ESG) criteria -✓✓Impact of integrating
ESG criteria into investment decisions
• Long-term risks -✓✓Seeking long-term risks to protect stakeholders
• Financial ratios for investors -✓✓Purpose of using financial ratios for investors
• Standardized basis for performance evaluation -✓✓How financial ratios help in
comparing companies
• Performance benchmarking -✓✓How financial ratios aid in performance
benchmarking
• Profitability ratios -✓✓What do profitability ratios indicate?
• Current ratio -✓✓What does the current ratio evaluate?
• High average collection period -✓✓What does a high average collection period
indicate?
• High current ratio -✓✓What does a high current ratio suggest about a company's
financial health?
• High accounts receivable turnover rate -✓✓What does a high accounts
receivable turnover rate indicate?
• High debt-to-assets ratio -✓✓What does a high debt-to-assets ratio suggest?
