3/31/25, 9:29 D076 Flashcards |
AM
D076 EXAM QUESTIONS AND ANSWERS WITH COMPLETE
SOLUTIONS VERIFIED GRADED A++
Terms in this set (320)
In which way is accounting different from Accounting is backward looking, while finance is focused on the future.
finance?
What is the main question that both Will the benefits of the action outweigh the costs?
individuals and companies must
consider when making financial
decisions to reach a goal?
A financial manager at a company is Making financing decisions
trying to determine whether to issue new
stocks or new bonds to cover the costs of
a project the company is doing the
next year.
How can investing help a person reach It provides access to potential revenue or increases in value to help meet goals
personal financial goals? faster.
A sign company is planning to have an Primary market
initial public offering (IPO). In which type
of market will its stock first be sold to
the public?
Which type of economic indicator Lagging indicator
changes after the economy changes and
helps identify trends in the long term?
How does an investment institution, such By providing individuals and firms access to financial markets to buy or sell
as a mutual fund, facilitate the circulation financial securities
of money in the economy?
Which type of economic indicator is used Leading indicator
by governments and policymakers to
implement or alter policies in an effort to
avoid or minimize the effects of an
economic downturn?
1/
9
, 3/31/25, 9:29 D076 Flashcards |
AM
Suppose an individual does not eat Moral
chocolate because eating chocolate
goes against his personal beliefs. Which
type of standard is this?
Although there is no company policy regarding it, a financial manager chooses
Which action is based upon moral
not to accept gifts from the company's clients to ensure that she does not create
standards?
a conflict of interest.
What should a potential bondholder Set strict covenants that the company cannot uphold if it chooses a risky project
(lender) do to prevent a company
(borrower) from taking on risky projects?
What is the term for an individual's Morals
beliefs concerning what is and is not
acceptable to personally do?
Which factor contributes to the inflation Increase in demand for goods and services
of the prices of goods and services
over time?
Why can compounding interest be a Compounding interest can be a good tool because it allows a lender to gain
good tool but also a significant interest on interest, but it is a detriment because it causes a borrower to pay
detriment? interest on interest.
Which component of the required rate of Opportunity cost
return takes into account the loss of
potential gain from other alternatives?
Inflation is calculated by determining the rate at which the average price level of
How is inflation calculated?
particular goods and services increases over a period of time in an economy.
Based on the following information about Stock A
the stocks of several companies, which
stock displays the greatest amount of
risk?
Stock A: Return = 22.22%, Standard
Deviation = 9.99%
Stock B: Return = 15.05%, Standard
Deviation = 7.35%
Stock C: Return = 38.83%, Standard
Deviation = 4.54%
Stock D: Return = 5.69%, Standard
Deviation = 5.32%
What is the relationship between risk The higher risk an investor takes, the higher return the investor expects to receive.
and return?
Maya is considering purchasing stock in a Risk diversification
certain company. Her financial advisor
suggests that she purchase stocks in
multiple companies instead of just one.
Which risk management technique is this
financial advisor suggesting?
2/
9
AM
D076 EXAM QUESTIONS AND ANSWERS WITH COMPLETE
SOLUTIONS VERIFIED GRADED A++
Terms in this set (320)
In which way is accounting different from Accounting is backward looking, while finance is focused on the future.
finance?
What is the main question that both Will the benefits of the action outweigh the costs?
individuals and companies must
consider when making financial
decisions to reach a goal?
A financial manager at a company is Making financing decisions
trying to determine whether to issue new
stocks or new bonds to cover the costs of
a project the company is doing the
next year.
How can investing help a person reach It provides access to potential revenue or increases in value to help meet goals
personal financial goals? faster.
A sign company is planning to have an Primary market
initial public offering (IPO). In which type
of market will its stock first be sold to
the public?
Which type of economic indicator Lagging indicator
changes after the economy changes and
helps identify trends in the long term?
How does an investment institution, such By providing individuals and firms access to financial markets to buy or sell
as a mutual fund, facilitate the circulation financial securities
of money in the economy?
Which type of economic indicator is used Leading indicator
by governments and policymakers to
implement or alter policies in an effort to
avoid or minimize the effects of an
economic downturn?
1/
9
, 3/31/25, 9:29 D076 Flashcards |
AM
Suppose an individual does not eat Moral
chocolate because eating chocolate
goes against his personal beliefs. Which
type of standard is this?
Although there is no company policy regarding it, a financial manager chooses
Which action is based upon moral
not to accept gifts from the company's clients to ensure that she does not create
standards?
a conflict of interest.
What should a potential bondholder Set strict covenants that the company cannot uphold if it chooses a risky project
(lender) do to prevent a company
(borrower) from taking on risky projects?
What is the term for an individual's Morals
beliefs concerning what is and is not
acceptable to personally do?
Which factor contributes to the inflation Increase in demand for goods and services
of the prices of goods and services
over time?
Why can compounding interest be a Compounding interest can be a good tool because it allows a lender to gain
good tool but also a significant interest on interest, but it is a detriment because it causes a borrower to pay
detriment? interest on interest.
Which component of the required rate of Opportunity cost
return takes into account the loss of
potential gain from other alternatives?
Inflation is calculated by determining the rate at which the average price level of
How is inflation calculated?
particular goods and services increases over a period of time in an economy.
Based on the following information about Stock A
the stocks of several companies, which
stock displays the greatest amount of
risk?
Stock A: Return = 22.22%, Standard
Deviation = 9.99%
Stock B: Return = 15.05%, Standard
Deviation = 7.35%
Stock C: Return = 38.83%, Standard
Deviation = 4.54%
Stock D: Return = 5.69%, Standard
Deviation = 5.32%
What is the relationship between risk The higher risk an investor takes, the higher return the investor expects to receive.
and return?
Maya is considering purchasing stock in a Risk diversification
certain company. Her financial advisor
suggests that she purchase stocks in
multiple companies instead of just one.
Which risk management technique is this
financial advisor suggesting?
2/
9
