2024 ACTUAL QUESTIONS AND WELL ELABORATED ANSWERS
What area of finance involves deciding which assets to invest in to create wealth in the future?
Investments
(Investments are an area of finance that involves deciding which assets to invest in to create wealth in
the future.)
Hannah is the financial manager of a firm. A project that she has recommended has been approved and
will cost $5 million. Since the company does not have enough cash on reserve, Hannah must figure out
how to raise enough money to start the project. She can choose whether to issue new bonds, new
stocks, a mortgage loan, or some combination of those options.
What task is Hannah performing in this scenario?
Making a financing decision
(Since the project has already been approved, Hannah is trying to find a way to finance the investment
and considering its capital structure.)
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Maria and Mateo are setting financial goals. They decide that they need to save $200 each month to
reach their goal of taking their children to visit their grandparents in Spain next summer.
What is the objective of setting such a goal?