WGU D076 ALL POSSIBLE QUESTIONS AND
ANSWERS NEW YEAR SOLVED 100%
Business finance
Which area of finance deals with sources of funding and the capital structure of
corporations and seeks to increase the value of a firm to its owners?
Finance focuses on the future, while accounting is generally backward-
looking.
What is the primary difference between finance and accounting?
Investments
Which subspecialty of finance primarily involves deciding which assets will create
more wealth and earn positive returns?
Investments
An area of finance that deals with investment allocation and asset pricing.
Financial Institutions
An area of finance that involves organizations that accept deposits, offer investment
products, loan money, or broker financial transactions.
Corporate Finance.
An area of finance that involves activities used to increase shareholder wealth.
To maximize satisfaction from products purchased and services obtained
What is the primary aim of personal finance goals?
Do the benefits of this investment outweigh the costs?
What should be the main question a firm asks when considering any investment
decision?
To maximize owner wealth
What is the primary goal of the financial manager of a firm?
making investment decisions,
making financing decisions, and
managing working capital.
What are three main tasks that a financial manager of a firm does in order to achieve
the goal of the firm, which is to maximize shareholder wealth?
CFO, Chief Financial Officer
Who is the highest ranking officer in corporate finance?
The CFO is responsible for all the financial decisions made by the firm. He or
she serves as the CEO's right-hand person in all money matters and oversees
the financial analysis and decision-making of the firm.
What does the CFO do?
Making investment decisions
Which task does a financial manager perform when assessing the costs and benefits
of potential projects?
Private equity
Which financial career focuses on investing capital into firms whose shares are not
currently sold on any public stock exchange?
Making financing decisions
Which task does a financial manager perform when choosing to obtain a loan to
purchase a piece of equipment for a new project?
Treasury, Corporate, and Stocks
What are the three most important types of securities?
,To protect Investors
Why does the SEC oversee Financial Markets?
To provide liquidity and determine prices
What are the purposes of financial markets?
Secondary market
In which financial market are securities such as stocks and bonds are traded after
their initial issuance?
Money market
What kind of market primarily allows institutions to borrow and lend in the short
term?
Primary market
A local start-up company just hit its five-year anniversary and is planning an initial
public offering sometime this year. In order to issue public stock, which market will
the company use?
An institution that accepts and pays interest on deposits of money, as well as
extends loans
What is a depository institution?
To conduct financial transactions such as investments, loans, and deposits
What is the primary role of financial institutions?
Investment bank
A large corporation is looking to merge with another large corporation. Which
financial institution can help them do this?
Pension fund
Which type of financial institution deals mainly with providing for retirement through
employers?
They use returns from stocks and bonds.
How do insurance companies pay policyholders when a claim is made?
Central bank
Which financial institution ensures that a nation's economy remains healthy by
controlling the amount of money circulating in the economy?
Leading, Lagging, and coincident
What are the three types of economic indicators?
Lagging
Unemployment rate is which type of economic indicator?
To regulate inflation and unemployment
The Federal Reserve sometimes adjusts the interest rate at which commercial banks
can borrow from it. What is the purpose of adjusting the interest rate?
It may indicate an economic downturn.
What would an inverted yield curve signal?
They are analyzed during economic shifts to provide information about the
current state of the economy.
In what way are coincident indicators useful?
To protect investors
Which responsibility is a focus of the U.S. Securities and Exchange Commission?
Investment institutions
Which type of financial institution provides individuals and firms access to financial
markets?
Private equity
, Which financial institution includes entities that receive money from institutional
investors and wealthy individuals to buy troubled companies to improve them and
earn returns by selling them or going public?
Leading
Yield curve is which type of economic indicator?
Legal
Which type of error would result in a set repercussion or penalty given by the
government?
Moral
Lucas is a financial advisor working for Bullzai, Inc. He is faced with a dilemma.
Bullzai has started changing its practices in order to increase profit. As a financial
advisor, he is now supposed to suggest to clients to invest in portfolios that will not
do as well as the portfolios that Bullzai is invested in. This is an accepted practice
done by other businesses in the industry, and it complies with all standards set by
the government. However, Lucas knows that this practice is not in his clients' best
interest. What type of dilemma is Lucas facing?
An ethical action is based on accepted standards of conduct.
What characterizes an ethical action?
Moral
Which term reflects a person's beliefs about right and wrong, good and bad, or just
and unjust?
Accounting
The system of recording, reporting, and summarizing past financial information and
transactions.
Accounts Receivable Turnover (AR Turnover)
An activity ratio found by credit sales divided by accounts receivable.
Activity Ratios
A category of ratios that measure how well a company uses its assets to generate
sales or cash, showing the firm's operational efficiency and profitability.
Additional Funds Needed (AFN)
Another name for the discretionary financing needed or external financing needed. It
represents the additional financing needed given a firm's expectations for future
growth.
Affirmative Covenants
A bond covenant that describes things the company pledges itself to do in order to
protect bondholders.Go To
Agency Costs
Costs that are incurred when management does not act in the best interest of
shareholders.
Agency Problem
When the agent (the management) does not act in the best interest of the principal
(the owners).Go To
Aggressive Assets
Companies or securities with beta greater than 1.
Annual Percentage Rate
The annual interest rate that is charged for borrowing money or that is earned
through investment.
Annuity
A stream of cash flows of an equal amount paid every consecutive period.Go To
Annuity Due
ANSWERS NEW YEAR SOLVED 100%
Business finance
Which area of finance deals with sources of funding and the capital structure of
corporations and seeks to increase the value of a firm to its owners?
Finance focuses on the future, while accounting is generally backward-
looking.
What is the primary difference between finance and accounting?
Investments
Which subspecialty of finance primarily involves deciding which assets will create
more wealth and earn positive returns?
Investments
An area of finance that deals with investment allocation and asset pricing.
Financial Institutions
An area of finance that involves organizations that accept deposits, offer investment
products, loan money, or broker financial transactions.
Corporate Finance.
An area of finance that involves activities used to increase shareholder wealth.
To maximize satisfaction from products purchased and services obtained
What is the primary aim of personal finance goals?
Do the benefits of this investment outweigh the costs?
What should be the main question a firm asks when considering any investment
decision?
To maximize owner wealth
What is the primary goal of the financial manager of a firm?
making investment decisions,
making financing decisions, and
managing working capital.
What are three main tasks that a financial manager of a firm does in order to achieve
the goal of the firm, which is to maximize shareholder wealth?
CFO, Chief Financial Officer
Who is the highest ranking officer in corporate finance?
The CFO is responsible for all the financial decisions made by the firm. He or
she serves as the CEO's right-hand person in all money matters and oversees
the financial analysis and decision-making of the firm.
What does the CFO do?
Making investment decisions
Which task does a financial manager perform when assessing the costs and benefits
of potential projects?
Private equity
Which financial career focuses on investing capital into firms whose shares are not
currently sold on any public stock exchange?
Making financing decisions
Which task does a financial manager perform when choosing to obtain a loan to
purchase a piece of equipment for a new project?
Treasury, Corporate, and Stocks
What are the three most important types of securities?
,To protect Investors
Why does the SEC oversee Financial Markets?
To provide liquidity and determine prices
What are the purposes of financial markets?
Secondary market
In which financial market are securities such as stocks and bonds are traded after
their initial issuance?
Money market
What kind of market primarily allows institutions to borrow and lend in the short
term?
Primary market
A local start-up company just hit its five-year anniversary and is planning an initial
public offering sometime this year. In order to issue public stock, which market will
the company use?
An institution that accepts and pays interest on deposits of money, as well as
extends loans
What is a depository institution?
To conduct financial transactions such as investments, loans, and deposits
What is the primary role of financial institutions?
Investment bank
A large corporation is looking to merge with another large corporation. Which
financial institution can help them do this?
Pension fund
Which type of financial institution deals mainly with providing for retirement through
employers?
They use returns from stocks and bonds.
How do insurance companies pay policyholders when a claim is made?
Central bank
Which financial institution ensures that a nation's economy remains healthy by
controlling the amount of money circulating in the economy?
Leading, Lagging, and coincident
What are the three types of economic indicators?
Lagging
Unemployment rate is which type of economic indicator?
To regulate inflation and unemployment
The Federal Reserve sometimes adjusts the interest rate at which commercial banks
can borrow from it. What is the purpose of adjusting the interest rate?
It may indicate an economic downturn.
What would an inverted yield curve signal?
They are analyzed during economic shifts to provide information about the
current state of the economy.
In what way are coincident indicators useful?
To protect investors
Which responsibility is a focus of the U.S. Securities and Exchange Commission?
Investment institutions
Which type of financial institution provides individuals and firms access to financial
markets?
Private equity
, Which financial institution includes entities that receive money from institutional
investors and wealthy individuals to buy troubled companies to improve them and
earn returns by selling them or going public?
Leading
Yield curve is which type of economic indicator?
Legal
Which type of error would result in a set repercussion or penalty given by the
government?
Moral
Lucas is a financial advisor working for Bullzai, Inc. He is faced with a dilemma.
Bullzai has started changing its practices in order to increase profit. As a financial
advisor, he is now supposed to suggest to clients to invest in portfolios that will not
do as well as the portfolios that Bullzai is invested in. This is an accepted practice
done by other businesses in the industry, and it complies with all standards set by
the government. However, Lucas knows that this practice is not in his clients' best
interest. What type of dilemma is Lucas facing?
An ethical action is based on accepted standards of conduct.
What characterizes an ethical action?
Moral
Which term reflects a person's beliefs about right and wrong, good and bad, or just
and unjust?
Accounting
The system of recording, reporting, and summarizing past financial information and
transactions.
Accounts Receivable Turnover (AR Turnover)
An activity ratio found by credit sales divided by accounts receivable.
Activity Ratios
A category of ratios that measure how well a company uses its assets to generate
sales or cash, showing the firm's operational efficiency and profitability.
Additional Funds Needed (AFN)
Another name for the discretionary financing needed or external financing needed. It
represents the additional financing needed given a firm's expectations for future
growth.
Affirmative Covenants
A bond covenant that describes things the company pledges itself to do in order to
protect bondholders.Go To
Agency Costs
Costs that are incurred when management does not act in the best interest of
shareholders.
Agency Problem
When the agent (the management) does not act in the best interest of the principal
(the owners).Go To
Aggressive Assets
Companies or securities with beta greater than 1.
Annual Percentage Rate
The annual interest rate that is charged for borrowing money or that is earned
through investment.
Annuity
A stream of cash flows of an equal amount paid every consecutive period.Go To
Annuity Due
