1|Page
WGU D076 Finance Skills For Managers Objective Assessment (OA) Final||Newest
Exam!!!
Risk that results from factors at a particular firm and can be reduced through
diversification; also called firm-specific risk or nonsystematic risk.Go To - ANSWER-
Idiosyncratic Risk Risk
Cash flows that result from accepting a project.Go To - ANSWER-Incremental Cash
Flows
The rate at which the average price level of a basket of chosen goods and services in
an economy increases over a period of time.Go To - ANSWER-Inflation
When a privately held company first offers shares of stock to outside investors to raise
capital, therefore becoming a publicly owned company.Go To - ANSWER-Initial Public
Offering (IPO)
Charge premiums to invest in bonds and stocks to pay claims.Go To - ANSWER-
Insurance Companies
The percentage of the principal that a lender charges a borrower for the use of
assets.Go To - ANSWER-Interest Rate
The probability that changes in interest rates will impact the value of a bond.Go To -
ANSWER-Interest Rate Risk
The rate of return that a firm earns on its capital projects.Go To - ANSWER-Internal
Rate of Return (IRR)
The value of an asset as determined through fundamental analysis without referring to
the asset's market value.Go To - ANSWER-Intrinsic Value
,2|Page
An activity ratio found by COGS divided by inventory.Go To - ANSWER-Inventory
Turnover
A financial intermediary that offers complex financial transactions such as underwriting,
facilitating mergers, and buying and selling financial securities on behalf of large
institutions.Go To - ANSWER-Investment Bank
An area of finance that involves deciding which assets to invest in to create wealth in
the future.Go To - ANSWER-Investments
Why is understanding the definition of finance important in managing personal
finances? - ANSWER-It helps individuals compare the costs and benefits of an action to
determine whether to take that action.
In which type of market would a company issue bonds or stocks for the first time? -
ANSWER-Primary market
Which type of financial institution is a mutual fund? - ANSWER-Investment institution
Which financial institution specializes in managing and administering retirement funds? -
ANSWER-Pension funds
Which type of economic indicator is the consumer price index? - ANSWER-Lagging
indicator
What does the term ethical refer to? - ANSWER-The accepted standards of conduct
that guide a person's behavior
A company's officers and board of directors are selling their stocks in the firm at higher
prices due to false accounting reports that made the stock seem more valuable than it
truly was. Which ethical issue is occurring in this situation? - ANSWER-Agency problem
due to conflicting interests
, 3|Page
Generating cash or stock from the sales or IPO of companies in the portfolio of
investments.Go To - ANSWER-Harvest
The return over the entire period that an investor owns a financial security.Go To -
ANSWER-Holding Period Return
The required rate of return that a company expects to earn in order to consider a
project.Go To - ANSWER-Hurdle Rate
A security that has some elements that resemble equity and others that resemble
debt.Go To - ANSWER-Hybrid Security
Following the laws and rules set by an authority.Go To - ANSWER-Legal
Another name for debt or liability.Go To - ANSWER-Leverage
A category of ratios that consider how a firm is financed.Go To - ANSWER-Leverage
Ratios
An asset that can be converted into cash quickly without the loss of significant value.Go
To - ANSWER-Liquid Asset
The ability to turn financial securities into cash easily without losing significant value.Go
To - ANSWER-Liquidity
A category of ratios that measure a firm's ability to meet short-term obligations.Go To -
ANSWER-Liquidity Ratios
The current market value of a publicly traded company's total outstanding shares,
indicating the size of a company.Go To - ANSWER-Market Capitalization
WGU D076 Finance Skills For Managers Objective Assessment (OA) Final||Newest
Exam!!!
Risk that results from factors at a particular firm and can be reduced through
diversification; also called firm-specific risk or nonsystematic risk.Go To - ANSWER-
Idiosyncratic Risk Risk
Cash flows that result from accepting a project.Go To - ANSWER-Incremental Cash
Flows
The rate at which the average price level of a basket of chosen goods and services in
an economy increases over a period of time.Go To - ANSWER-Inflation
When a privately held company first offers shares of stock to outside investors to raise
capital, therefore becoming a publicly owned company.Go To - ANSWER-Initial Public
Offering (IPO)
Charge premiums to invest in bonds and stocks to pay claims.Go To - ANSWER-
Insurance Companies
The percentage of the principal that a lender charges a borrower for the use of
assets.Go To - ANSWER-Interest Rate
The probability that changes in interest rates will impact the value of a bond.Go To -
ANSWER-Interest Rate Risk
The rate of return that a firm earns on its capital projects.Go To - ANSWER-Internal
Rate of Return (IRR)
The value of an asset as determined through fundamental analysis without referring to
the asset's market value.Go To - ANSWER-Intrinsic Value
,2|Page
An activity ratio found by COGS divided by inventory.Go To - ANSWER-Inventory
Turnover
A financial intermediary that offers complex financial transactions such as underwriting,
facilitating mergers, and buying and selling financial securities on behalf of large
institutions.Go To - ANSWER-Investment Bank
An area of finance that involves deciding which assets to invest in to create wealth in
the future.Go To - ANSWER-Investments
Why is understanding the definition of finance important in managing personal
finances? - ANSWER-It helps individuals compare the costs and benefits of an action to
determine whether to take that action.
In which type of market would a company issue bonds or stocks for the first time? -
ANSWER-Primary market
Which type of financial institution is a mutual fund? - ANSWER-Investment institution
Which financial institution specializes in managing and administering retirement funds? -
ANSWER-Pension funds
Which type of economic indicator is the consumer price index? - ANSWER-Lagging
indicator
What does the term ethical refer to? - ANSWER-The accepted standards of conduct
that guide a person's behavior
A company's officers and board of directors are selling their stocks in the firm at higher
prices due to false accounting reports that made the stock seem more valuable than it
truly was. Which ethical issue is occurring in this situation? - ANSWER-Agency problem
due to conflicting interests
, 3|Page
Generating cash or stock from the sales or IPO of companies in the portfolio of
investments.Go To - ANSWER-Harvest
The return over the entire period that an investor owns a financial security.Go To -
ANSWER-Holding Period Return
The required rate of return that a company expects to earn in order to consider a
project.Go To - ANSWER-Hurdle Rate
A security that has some elements that resemble equity and others that resemble
debt.Go To - ANSWER-Hybrid Security
Following the laws and rules set by an authority.Go To - ANSWER-Legal
Another name for debt or liability.Go To - ANSWER-Leverage
A category of ratios that consider how a firm is financed.Go To - ANSWER-Leverage
Ratios
An asset that can be converted into cash quickly without the loss of significant value.Go
To - ANSWER-Liquid Asset
The ability to turn financial securities into cash easily without losing significant value.Go
To - ANSWER-Liquidity
A category of ratios that measure a firm's ability to meet short-term obligations.Go To -
ANSWER-Liquidity Ratios
The current market value of a publicly traded company's total outstanding shares,
indicating the size of a company.Go To - ANSWER-Market Capitalization
