WGU D076 Tests + Quizzes / 360 Q&As | Latest 2023/24 | Updated & Verified | Guaranteed Success | 75 Pages

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? Financial institutions Business finance Investments Real estate - Business finance is the area of finance that deals with uses and sources of funding to increase the value of the firm. What are the main services offered by financial institutions? - Accepting a wide variety of deposits, offering investment products, providing loans, and brokering financial transactions Which type of financial institution is a mutual fund? Contractual institution Federal institution Depository institution Investment institution - Investment institution. Investment institutions provide individuals and firms access to financial markets. A mutual fund - A mutual fund is an investment company that continually offers investments and buys financial securities and instruments (usually stocks or bonds) on behalf of investors. Mutual fund companies often have their own products or portfolios composed of multiple stocks and bonds. The performance of the funds determines the company's value. Even though the funds are a pool of financial securities, investors normally do not have the same rights that individual stockholders have. Which financial institution specializes in managing and administering retirement funds? Pension funds Private equity Investment banks - Pension funds specialize in retirement funds.Which type of economic indicator is the consumer price index? Lagging indicator Leading indicator Coincident indicator - CPI usually changes after the economy as a whole changes. (CPI) measures changes in the inflation rate. It examines the average prices of a basket of consumer goods and services and the changes associated with the cost of living. When the CPI decreases, it indicates deflation; when it increases, it indicates inflation. 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? Pursuing individual interest over client interests Conflict between work and personal affairs Agency problem due to conflicting interests - Agency problem due to conflicting interests! Accounting manipulation by management in pursuit of higher stock-related compensation is an example of an agency problem. Which subspecialty of finance primarily involves deciding which assets will create more wealth and earn positive returns? Accounting Financial institutions Capital structure Investments - Investments. Investments is the area of finance that seeks to create wealth in the future by deciding where to allocate money.