D076 Finance Skills for Managers Assessment Study Guide: Key
Concepts in Finance and Accounting 2025 Western Governors
University
D076 Assessment Study Guide
What is Finance? How is it different from Accounting?
Finance is defined as the study of managing and allocating funds at the personal or business level.
Finance is different from accounting because finance focuses on the future, while accounting is
generally backward-looking.
How are the end financial goals of corporations and individuals different?
The end financial goals of corporations are generally focused on maximizing owner wealth and
shareholder value and ensuring business growth. While individuals often prioritize personal financial
security, retirement, and managing life-specific goals.
What three tasks does a Financial Manager have in a firm?
1. Making investment decisions
2. Making financing decisions
3. Managing working capital
What are the differences between primary and secondary markets?
The main difference between primary and secondary markets is that companies use the primary
market to sell their financial securities to raise capital, while the secondary market is where securities
,are traded after the initial issuance.
Select the correct definition for each financial institution:
Central Bank Investment Bank Bank and Credit Union
Mutual Fund Insurance Companies Private Equity
A. Offer investments and buy financial securities and instruments on behalf of investors - Mutual
Fund
B. Receive money from institutional investors and wealthy individuals to buy high-potential
companies or troubled companies to improve and earn returns by selling or going public -
Private Equity
C. Receive deposits and extend loans to individuals and businesses - Bank and Credit Union
D. Offer various services such as underwriting, facilitating mergers, and trading financial securities
on behalf of large institutions and companies - Investment Bank
E. Charge premiums to invest in bonds and stocks to pay claims - Insurance Companies
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, F. Ensure that a nation’s economy remains healthy by controlling the amount of money
circulating in the economy - Central bank
Match the Economic Indicator based on the timing when it occurs.
Proves where the economy has been for a while: Unemployment rate and CPI (Lagging Indicators)
Indicates a direction the economy may go in the future: Yield Curve and Stock Market Return
(Leading Indicators)
Shows our current economic situation: GDP and Personal Income (Coincident Indicators)
A. Stock Market Return B. GDP C. Yield Curve
D. Personal Income E. Unemployment Rate F. CPI
- Leading (before the economy changes) indicators change before the economy changes and
include yield curve and stock market return
- Lagging (after the economy changes) indicators change after the economy changes and include
the unemployment rate and CPI
- Coincident indicators are collected and analyzed as economic shifts happen and include GDP
and personal income
What is the difference between Ethics and Morals?
The main difference between Ethics and Morals is that morals are defined as personal beliefs about
what is right and wrong. They are individual or cultural standards that guide behavior based on
personal values and principles. Ethics on the other hand is defined as following accepted standards of
moral conduct.
What are the different terms that are used for Interest Rates and under what scenarios do we
use each term?
There are three different terms for Interest rate, discount rate, required rate, and cost of capital.
Discount rate, which is the name for interest rate when used in time value of money calculations.
Required rate, The minimum return or compensation an investor requires in order to invest. And
finally, the cost of capital is the cost to a firm to use an investor’s capital.
Which would be more beneficial to a lender – simple interest or compound interest? Why?
For a lender, when it comes to investing, compound interest is the best option. Compound interest is
defined as the interest on the principal plus the interest on earned interest. While simple interest is
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Concepts in Finance and Accounting 2025 Western Governors
University
D076 Assessment Study Guide
What is Finance? How is it different from Accounting?
Finance is defined as the study of managing and allocating funds at the personal or business level.
Finance is different from accounting because finance focuses on the future, while accounting is
generally backward-looking.
How are the end financial goals of corporations and individuals different?
The end financial goals of corporations are generally focused on maximizing owner wealth and
shareholder value and ensuring business growth. While individuals often prioritize personal financial
security, retirement, and managing life-specific goals.
What three tasks does a Financial Manager have in a firm?
1. Making investment decisions
2. Making financing decisions
3. Managing working capital
What are the differences between primary and secondary markets?
The main difference between primary and secondary markets is that companies use the primary
market to sell their financial securities to raise capital, while the secondary market is where securities
,are traded after the initial issuance.
Select the correct definition for each financial institution:
Central Bank Investment Bank Bank and Credit Union
Mutual Fund Insurance Companies Private Equity
A. Offer investments and buy financial securities and instruments on behalf of investors - Mutual
Fund
B. Receive money from institutional investors and wealthy individuals to buy high-potential
companies or troubled companies to improve and earn returns by selling or going public -
Private Equity
C. Receive deposits and extend loans to individuals and businesses - Bank and Credit Union
D. Offer various services such as underwriting, facilitating mergers, and trading financial securities
on behalf of large institutions and companies - Investment Bank
E. Charge premiums to invest in bonds and stocks to pay claims - Insurance Companies
1 | Page
, F. Ensure that a nation’s economy remains healthy by controlling the amount of money
circulating in the economy - Central bank
Match the Economic Indicator based on the timing when it occurs.
Proves where the economy has been for a while: Unemployment rate and CPI (Lagging Indicators)
Indicates a direction the economy may go in the future: Yield Curve and Stock Market Return
(Leading Indicators)
Shows our current economic situation: GDP and Personal Income (Coincident Indicators)
A. Stock Market Return B. GDP C. Yield Curve
D. Personal Income E. Unemployment Rate F. CPI
- Leading (before the economy changes) indicators change before the economy changes and
include yield curve and stock market return
- Lagging (after the economy changes) indicators change after the economy changes and include
the unemployment rate and CPI
- Coincident indicators are collected and analyzed as economic shifts happen and include GDP
and personal income
What is the difference between Ethics and Morals?
The main difference between Ethics and Morals is that morals are defined as personal beliefs about
what is right and wrong. They are individual or cultural standards that guide behavior based on
personal values and principles. Ethics on the other hand is defined as following accepted standards of
moral conduct.
What are the different terms that are used for Interest Rates and under what scenarios do we
use each term?
There are three different terms for Interest rate, discount rate, required rate, and cost of capital.
Discount rate, which is the name for interest rate when used in time value of money calculations.
Required rate, The minimum return or compensation an investor requires in order to invest. And
finally, the cost of capital is the cost to a firm to use an investor’s capital.
Which would be more beneficial to a lender – simple interest or compound interest? Why?
For a lender, when it comes to investing, compound interest is the best option. Compound interest is
defined as the interest on the principal plus the interest on earned interest. While simple interest is
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