WGU D775 INTRO TO BUSINESS FINANCE
EXAM SCRIPT WITH VERIFIED ANSWERS
◉ Capital raising
Answer: Securing funding for business operations and projects.
◉ Money management activity
Answer: Involves the creation, circulation, and management of
money.
◉ Common stock
Answer: A share of ownership in a firm with voting rights.
◉ Preferred stock characteristic
Answer: Fixed dividends.
◉ Purpose of bonds for issuers
Answer: To raise capital without diluting ownership.
◉ Junk bonds
Answer: Speculative bonds.
,◉ Options in financial derivatives
Answer: They give the buyer the right, but not the obligation, to
buy or sell an asset.
◉ Economies of scale for funds
Answer: By making large-scale investments that reduce
transaction costs.
◉ Initial public offering (IPO)
Answer: The first sale of a company's stock to the public.
◉ Secondary market activity
Answer: The trading of stocks on the New York Stock Exchange.
◉ Types of financial markets
Answer: Primary markets and secondary markets.
◉ Role of financial regulators
Answer: Ensuring fair and transparent markets.
◉ Depository institutions
Answer: Institutions that accept deposits and provide loans.
◉ Primary source of revenue for depository institutions
, Answer: Interest income from loans.
◉ Rising Consumer Price Index (CPI) effect
Answer: It indicates increased costs for raw materials and labor.
◉ Return on equity goals
Answer: Beating their return on equity goals for each quarter
◉ Environmental, social, and governance (ESG) criteria
Answer: Impact of integrating ESG criteria into investment
decisions
◉ Long-term risks
Answer: Seeking long-term risks to protect stakeholders
◉ Financial ratios for investors
Answer: Purpose of using financial ratios for investors
◉ Standardized basis for performance evaluation
Answer: How financial ratios help in comparing companies
◉ Performance benchmarking
Answer: How financial ratios aid in performance benchmarking
EXAM SCRIPT WITH VERIFIED ANSWERS
◉ Capital raising
Answer: Securing funding for business operations and projects.
◉ Money management activity
Answer: Involves the creation, circulation, and management of
money.
◉ Common stock
Answer: A share of ownership in a firm with voting rights.
◉ Preferred stock characteristic
Answer: Fixed dividends.
◉ Purpose of bonds for issuers
Answer: To raise capital without diluting ownership.
◉ Junk bonds
Answer: Speculative bonds.
,◉ Options in financial derivatives
Answer: They give the buyer the right, but not the obligation, to
buy or sell an asset.
◉ Economies of scale for funds
Answer: By making large-scale investments that reduce
transaction costs.
◉ Initial public offering (IPO)
Answer: The first sale of a company's stock to the public.
◉ Secondary market activity
Answer: The trading of stocks on the New York Stock Exchange.
◉ Types of financial markets
Answer: Primary markets and secondary markets.
◉ Role of financial regulators
Answer: Ensuring fair and transparent markets.
◉ Depository institutions
Answer: Institutions that accept deposits and provide loans.
◉ Primary source of revenue for depository institutions
, Answer: Interest income from loans.
◉ Rising Consumer Price Index (CPI) effect
Answer: It indicates increased costs for raw materials and labor.
◉ Return on equity goals
Answer: Beating their return on equity goals for each quarter
◉ Environmental, social, and governance (ESG) criteria
Answer: Impact of integrating ESG criteria into investment
decisions
◉ Long-term risks
Answer: Seeking long-term risks to protect stakeholders
◉ Financial ratios for investors
Answer: Purpose of using financial ratios for investors
◉ Standardized basis for performance evaluation
Answer: How financial ratios help in comparing companies
◉ Performance benchmarking
Answer: How financial ratios aid in performance benchmarking
