WGU D076 Quiz Bank (New 2024/ 2025 Update) Finance Skills for Managers| Questions and Verified Answers| 100% Correct| A Grade

WGU D076 Quiz Bank (New 2024/ 2025 Update) Finance Skills for Managers| Questions and Verified Answers| 100% Correct| A Grade QUESTION In what way are coincident indicators useful? They are analyzed during economic shifts to provide information about the current state of the economy. They are useful in conjunction with GDP and personal income to predict the future health of the economy. Incorrect. GDP and personal income are both types of coincident indicators, and neither of them is used to predict future economic changes. They help investors know which sectors of the economy to invest in. Answer: They are analyzed during economic shifts to provide information about the current state of the economy. Coincident indicators help analysts see the big picture of economic trends. QUESTION Which responsibility is a focus of the U.S. Securities and Exchange Commission? To provide liquidity To regulate inflation To raise interest rates To protect investors Answer: To protect investors. The responsibilities of SEC are to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation QUESTION Which type of financial institution provides individuals and firms access to financial markets? Depository institutions Credit institutions Investment institutions Contractual savings institutions Answer: Investment institutions. Investment institutions provide both individuals and firms access to financial markets. QUESTION Which financial institution includes entities that receive money from institutional investors and wealthy individuals to buy troubled companies to improve them and earn returns by selling them or going public? Credit union Commercial bank Mutual fund Private equity Answer: Private equity. This is the role of a buyout private equity firm. QUESTION Yield curve is which type of economic indicator? Coincident Lagging Leading Concurrent Answer: Leading. Leading indicators change before the economy changes. QUESTION About a year ago, the short-term Treasury bill had 1.54% interest and the long-term Treasury note had 2.54% interest. This week, the 1-year Treasury bill has an interest rate of 3.13%, while the 10-year Treasury note has an interest rate of 2.28%. What does this information indicate about the future economy? It may indicate an economic downturn. It may reflect an expectation that the economy will grow in the future along with higher inflation. It may indicate that the economy is in a steady state. It may indicate a decreasing unemployment rate along with higher wages. Answer: It may indicate an economic downturn. Since the long-term Treasury interest rate is lower than the short-term rate, it has an inverted yield curve, which may indicate an economic downturn. QUESTION What characterizes an ethical action? An ethical action is based on what is right or wrong, whether or not society agrees. An ethical action will achieve the best outcome for the decision maker. An ethical action takes into account other individuals' values over the decision maker's own. An ethical action is based on accepted standards of conduct. Answer: An ethical action is based on accepted standards of conduct. QUESTION Why would bondholders set bond contracts that are very strict to deter the company from taking on risky projects? Bondholders are primarily interested in maximizing shareholder wealth. Bondholders are primarily interested in maintaining the company's current financial status. Bondholders are primarily interested in making sure they will be paid back. Bondholders are primarily interested in the company paying more dividends. Answer: Bondholders are primarily interested in making sure they will be paid back. If a company takes on a riskier project, there is a higher probability of the project being unsuccessful, which means that the bondholders may put themselves at a higher risk of not receiving their loan back. QUESTION Which kind of projects are bondholders interested in? Riskier projects that will increase the value of the company's stocks and their own financial return Riskier projects that will provide higher returns Safe projects with a high