D076 Finance Skills for Managers
Module 4 Question and answers rated
A+ 2025/2026
What is the term for the percentage of the Interest rate
principal that a lender charges a borrower
for the use of as-sets?
1. How is the interest rate expressed? As a percentage
2. What is the main purpose of charging interest? It allows borrowers to
pay to
use the assets of another
en-tity to accomplish
their own goals
3. What is a component of the required rate of return? Compound
interest
4. Why would a long-term investment require a higher There is greater
risk involved
rate of return? and a higher opportunity cost.
5. You just inherited $25,000 from a long-lost Buying a brand new car worth
relative. You decide to put the money in a $25,000
savings account for the time being. What
would be considered an opportunity cost of
putting the money in savings?
6. Five years ago, Ahmed decided he was going to save Inflation
up to purchase a car with cash. The car he
wants is priced at $15,000. He saved $245 a
month in an ac-count that gave him enough
interest to have $15,000 in five years. Today,
he pulled out $15,000 from his account to
buy the car, but the price of the car is now
$16,562. Which component of the required
rate of return did Ahmed forget to
1/
5
, consider?
7. Why is built-in inflation linked to adaptive Workers want higher
expecta-tions? wages to keep their
standard of liv-
2/
5
Module 4 Question and answers rated
A+ 2025/2026
What is the term for the percentage of the Interest rate
principal that a lender charges a borrower
for the use of as-sets?
1. How is the interest rate expressed? As a percentage
2. What is the main purpose of charging interest? It allows borrowers to
pay to
use the assets of another
en-tity to accomplish
their own goals
3. What is a component of the required rate of return? Compound
interest
4. Why would a long-term investment require a higher There is greater
risk involved
rate of return? and a higher opportunity cost.
5. You just inherited $25,000 from a long-lost Buying a brand new car worth
relative. You decide to put the money in a $25,000
savings account for the time being. What
would be considered an opportunity cost of
putting the money in savings?
6. Five years ago, Ahmed decided he was going to save Inflation
up to purchase a car with cash. The car he
wants is priced at $15,000. He saved $245 a
month in an ac-count that gave him enough
interest to have $15,000 in five years. Today,
he pulled out $15,000 from his account to
buy the car, but the price of the car is now
$16,562. Which component of the required
rate of return did Ahmed forget to
1/
5
, consider?
7. Why is built-in inflation linked to adaptive Workers want higher
expecta-tions? wages to keep their
standard of liv-
2/
5
