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WGU D076 FINANCIAL SKILLS FOR MANAGERS, D076
PRE-ASSESSMENT EXAM ALL QUESTIONS AND
CORRECT DETAILED ANSWERS TOP RATED
VERSION FOR 2025-2026 |ALREADY A GRADED |NEW
AND REVISED
1. Which task does a financial manager perform when assessing the costs and benefits
of potential projects?: Making investment decisions
Correct! Understanding how benefits weigh up against costs is the first priority before moving
forward with financing and managerial decisions.
2. Which area of finance deals with sources of funding and the capital struc- ture of
corporations and seeks to increase the value of a firm to its owners?-
: Business finance
Correct! Business finance is the area of finance that deals with uses and sources of funding t
increase the value of the firm.
3. What is the primary difference between finance and accounting?: Finance focuses
on the future, Accounting focuses on the past
Correct! Finance is the management and allocation of capital with the objectives of investin
forecasting, budgeting, saving, lending, and borrowing.
4. Which subspecialty of finance primarily involves deciding which assets will create
more wealth and earn positive returns?: Investments
Correct! Investments is the area of finance that seeks to create wealth in the future by
deciding where to allocate money.
5. What is the primary goal of the financial manager of a firm?: To maximize owner
wealth
6. What is the primary aim of personal finance goals?: To maximize satisfaction from
products purchased and services obtained
Correct! The objective of personal financial goals is to maximize one's utility.
7. Which task does a financial manager perform when choosing to obtain a loan
to purchase a piece of equipment for a new project?: Make financial decisions
8. Which financial career focuses on investing capital into firms whose shares are not
currently sold on any public stock exchange?: Private equity
Correct! Private equity deals with investments in firms that are privately held and whose
ownership is not yet bought or sold on any public stock exchange.
9. What tool can you use to understand your overall personal cash flows?: -
Budgeting
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Correct! Budgeting helps you to understand your income and expenses and to analyze your
cash flows.
10. What is a reasonable alternative to keeping an emergency stash of cash?-
: Investing in a savings account
Correct! Investing in a readily withdrawable account that still earns some interest is a
value-preserving alternative.
,3 | Page
11. You want to buy a house, so you obtain a mortgage for which you can afford
the monthly payments. What process have you engaged in as part of your financial
decision-making?: Financing
Correct! Part of the personal finance process is figuring out how to finance your goals in a
way that is within your means.
12. What area of finance involves deciding which assets to invest in to create wealth in
the future?: Investments
Correct! Investments are an area of finance that involves deciding which assets to invest in
create wealth in the future.
13. Hannah is the financial manager of a firm. A project that she has recom- mended
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
Correct! Since the project has already been approved, Hannah is trying to find a way to
finance the investment and considering its capital structure.
14. 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?: To
maximize individual utility
Correct! While everyone has different personal financial goals, the objectives of such goals is
to maximize individual utility.
15. Which professional works with individuals to help them achieve their
financial goals?: Financial planner
Correct! Professional financial planners work with individuals to help them achieve their
financial goals.
16. Omar is about to purchase a new car for $30,000. He knows he wants to buy the
car, but he is still trying to decide how to pay for it. He has barely over
$30,000 in his bank account. He can either take out an auto loan from a bank or use a
mix of cash and an auto loan.
In this scenario, what is Omar doing?: Financing a goal
Correct! He has already made a decision to purchase the car and is now deciding on
financing options.
17. What are the purposes of financial markets?: To provide liquidity and deter- mine
prices
Correct! The purposes of financial markets are to provide liquidity and to determine prices.
,4 | Page
18. What kind of market primarily allows institutions to borrow and lend in the short
term?: Money market
Correct! Assets in money markets are typically highly liquid and intended for use within a
year or less.
19. A local start-up company just hit its five-year anniversary and is planning an
initial public offering sometime this year. In order to issue public stock, which
market will the company use?: Primary market
Correct! When a company issues stock for the first time to raise capital, shares must initially
sold through a primary market.
20. In which financial market are securities such as stocks and bonds are traded
after their initial issuance?: Secondary market
Correct! Financial securities are first sold in the primary financial market and then traded
among investors in the secondary financial market.
21. What is the primary role of financial institutions?: To conduct financial trans- actions
such as investments, loans, and deposits
Correct! Financial institutions conduct transactions to circulate money.
22. What is a depository institution?: An institution that accepts and pays interest on
deposits of money, as well as extends loans
Correct! This is the definition of a depository institution. Examples include banks and credit
unions.
23. Which financial institution ensures that a nation's economy remains healthy by
controlling the amount of money circulating in the economy?: Cen- tral bank
Correct! Central banks control the supply of money in the economy.
24. How do insurance companies pay policyholders when a claim is made?: -
They use returns from stocks and bonds.
Correct! Insurance companies invest the money that they earn from premiums into stocks an
bonds, and then the returns are used to fill claims.
25. Which type of financial institution deals mainly with providing for retire- ment
through employers?: Pension fund
Correct! Through employers, individuals can contribute to pension funds, which then invest
their money in the market to provide retirement funds.
26. A large corporation is looking to merge with another large corporation. Which
financial institution can help them do this?: Investment bank Correct! Investment
banks facilitate complex financial deals, like mergers.
27. Unemployment rate is which type of economic indicator?: Lagging
Correct! Lagging indicators change after the economy changes.
WGU D076 FINANCIAL SKILLS FOR MANAGERS, D076
PRE-ASSESSMENT EXAM ALL QUESTIONS AND
CORRECT DETAILED ANSWERS TOP RATED
VERSION FOR 2025-2026 |ALREADY A GRADED |NEW
AND REVISED
1. Which task does a financial manager perform when assessing the costs and benefits
of potential projects?: Making investment decisions
Correct! Understanding how benefits weigh up against costs is the first priority before moving
forward with financing and managerial decisions.
2. Which area of finance deals with sources of funding and the capital struc- ture of
corporations and seeks to increase the value of a firm to its owners?-
: Business finance
Correct! Business finance is the area of finance that deals with uses and sources of funding t
increase the value of the firm.
3. What is the primary difference between finance and accounting?: Finance focuses
on the future, Accounting focuses on the past
Correct! Finance is the management and allocation of capital with the objectives of investin
forecasting, budgeting, saving, lending, and borrowing.
4. Which subspecialty of finance primarily involves deciding which assets will create
more wealth and earn positive returns?: Investments
Correct! Investments is the area of finance that seeks to create wealth in the future by
deciding where to allocate money.
5. What is the primary goal of the financial manager of a firm?: To maximize owner
wealth
6. What is the primary aim of personal finance goals?: To maximize satisfaction from
products purchased and services obtained
Correct! The objective of personal financial goals is to maximize one's utility.
7. Which task does a financial manager perform when choosing to obtain a loan
to purchase a piece of equipment for a new project?: Make financial decisions
8. Which financial career focuses on investing capital into firms whose shares are not
currently sold on any public stock exchange?: Private equity
Correct! Private equity deals with investments in firms that are privately held and whose
ownership is not yet bought or sold on any public stock exchange.
9. What tool can you use to understand your overall personal cash flows?: -
Budgeting
,2 | Page
Correct! Budgeting helps you to understand your income and expenses and to analyze your
cash flows.
10. What is a reasonable alternative to keeping an emergency stash of cash?-
: Investing in a savings account
Correct! Investing in a readily withdrawable account that still earns some interest is a
value-preserving alternative.
,3 | Page
11. You want to buy a house, so you obtain a mortgage for which you can afford
the monthly payments. What process have you engaged in as part of your financial
decision-making?: Financing
Correct! Part of the personal finance process is figuring out how to finance your goals in a
way that is within your means.
12. What area of finance involves deciding which assets to invest in to create wealth in
the future?: Investments
Correct! Investments are an area of finance that involves deciding which assets to invest in
create wealth in the future.
13. Hannah is the financial manager of a firm. A project that she has recom- mended
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
Correct! Since the project has already been approved, Hannah is trying to find a way to
finance the investment and considering its capital structure.
14. 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?: To
maximize individual utility
Correct! While everyone has different personal financial goals, the objectives of such goals is
to maximize individual utility.
15. Which professional works with individuals to help them achieve their
financial goals?: Financial planner
Correct! Professional financial planners work with individuals to help them achieve their
financial goals.
16. Omar is about to purchase a new car for $30,000. He knows he wants to buy the
car, but he is still trying to decide how to pay for it. He has barely over
$30,000 in his bank account. He can either take out an auto loan from a bank or use a
mix of cash and an auto loan.
In this scenario, what is Omar doing?: Financing a goal
Correct! He has already made a decision to purchase the car and is now deciding on
financing options.
17. What are the purposes of financial markets?: To provide liquidity and deter- mine
prices
Correct! The purposes of financial markets are to provide liquidity and to determine prices.
,4 | Page
18. What kind of market primarily allows institutions to borrow and lend in the short
term?: Money market
Correct! Assets in money markets are typically highly liquid and intended for use within a
year or less.
19. A local start-up company just hit its five-year anniversary and is planning an
initial public offering sometime this year. In order to issue public stock, which
market will the company use?: Primary market
Correct! When a company issues stock for the first time to raise capital, shares must initially
sold through a primary market.
20. In which financial market are securities such as stocks and bonds are traded
after their initial issuance?: Secondary market
Correct! Financial securities are first sold in the primary financial market and then traded
among investors in the secondary financial market.
21. What is the primary role of financial institutions?: To conduct financial trans- actions
such as investments, loans, and deposits
Correct! Financial institutions conduct transactions to circulate money.
22. What is a depository institution?: An institution that accepts and pays interest on
deposits of money, as well as extends loans
Correct! This is the definition of a depository institution. Examples include banks and credit
unions.
23. Which financial institution ensures that a nation's economy remains healthy by
controlling the amount of money circulating in the economy?: Cen- tral bank
Correct! Central banks control the supply of money in the economy.
24. How do insurance companies pay policyholders when a claim is made?: -
They use returns from stocks and bonds.
Correct! Insurance companies invest the money that they earn from premiums into stocks an
bonds, and then the returns are used to fill claims.
25. Which type of financial institution deals mainly with providing for retire- ment
through employers?: Pension fund
Correct! Through employers, individuals can contribute to pension funds, which then invest
their money in the market to provide retirement funds.
26. A large corporation is looking to merge with another large corporation. Which
financial institution can help them do this?: Investment bank Correct! Investment
banks facilitate complex financial deals, like mergers.
27. Unemployment rate is which type of economic indicator?: Lagging
Correct! Lagging indicators change after the economy changes.
