Principles of Finance- D076 WGU questions and
answers 2024\2025 A+ Grade
In which way is accounting different from finance?
- correct answer Accounting is backward looking, while finance is focused on the future.
What is the main question that both individuals and companies must consider when making financial
decisions to reach a goal?
- correct answer Will the benefits of the action outweigh the costs?
A financial manager at a company is trying to determine whether to issue new stocks or new bonds to
cover the costs of a project the company is doing the next year.
Which main task in business finance is this situation an example of?
- correct answer Making financing decisions
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?
- correct answer Business finance
3
Which subspecialty of finance primarily involves deciding which assets will create more wealth and earn
positive returns?
- correct answer Investments
1
What is the primary goal of the financial manager of a firm?
- correct answer To maximize owner wealth
3
,What is the primary aim of personal finance goals?
- correct answer To maximize satisfaction from products purchased and services obtained
Which task does a financial manager perform when choosing to obtain a loan to purchase a piece of
equipment for a new project?
- correct answer The manager is deciding where to get the funds to support a new project, which means
the manager is making a financing decision.
Which financial career focuses on investing capital into firms whose shares are not currently sold on any
public stock exchange?
- correct answer Private equity
Which task does a financial manager perform when assessing the costs and benefits of potential
projects?
- correct answer Making investment decisions
What tool can you use to understand your overall personal cash flows?
- correct answer Budgeting
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?
- correct answer Financing
How can investing help a person reach personal financial goals?
- correct answer It provides access to potential revenue or increases in value to help meet goals faster.
A sign company is planning to have an initial public offering (IPO). In which type of market will its stock
first be sold to the public?
- correct answer Primary market
What are the purposes of financial markets?
- correct answer To provide liquidity and determine prices
, In which financial market are securities such as stocks and bonds are traded after their initial issuance?
- correct answer Secondary market
What kind of market primarily allows institutions to borrow and lend in the short term?
- correct answer Money market
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?
- correct answer When a company issues stock for the first time to raise capital, shares must initially be
sold through a primary market.
Money Market
- correct answer A type of financial market that government and corporate entities use to borrow and
lend money in the short term (less than a year).
Capital Market
- correct answer More often used for long-term assets that are held for greater than one year (ex: stock
markets and bond markets).
What is the primary role of financial institutions?
- correct answer To conduct financial transactions such as investments, loans, and deposits.
Depository institution
- correct answer An institution that accepts and pays interest on deposits of money, as well as extends
loans (banks, credit unions).
Which financial institution ensures that a nation's economy remains healthy by controlling the amount
of money circulating in the economy?
- correct answer Central bank
How do insurance companies pay policyholders when a claim is made?
- correct answer They use returns from stocks and bonds.
answers 2024\2025 A+ Grade
In which way is accounting different from finance?
- correct answer Accounting is backward looking, while finance is focused on the future.
What is the main question that both individuals and companies must consider when making financial
decisions to reach a goal?
- correct answer Will the benefits of the action outweigh the costs?
A financial manager at a company is trying to determine whether to issue new stocks or new bonds to
cover the costs of a project the company is doing the next year.
Which main task in business finance is this situation an example of?
- correct answer Making financing decisions
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?
- correct answer Business finance
3
Which subspecialty of finance primarily involves deciding which assets will create more wealth and earn
positive returns?
- correct answer Investments
1
What is the primary goal of the financial manager of a firm?
- correct answer To maximize owner wealth
3
,What is the primary aim of personal finance goals?
- correct answer To maximize satisfaction from products purchased and services obtained
Which task does a financial manager perform when choosing to obtain a loan to purchase a piece of
equipment for a new project?
- correct answer The manager is deciding where to get the funds to support a new project, which means
the manager is making a financing decision.
Which financial career focuses on investing capital into firms whose shares are not currently sold on any
public stock exchange?
- correct answer Private equity
Which task does a financial manager perform when assessing the costs and benefits of potential
projects?
- correct answer Making investment decisions
What tool can you use to understand your overall personal cash flows?
- correct answer Budgeting
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?
- correct answer Financing
How can investing help a person reach personal financial goals?
- correct answer It provides access to potential revenue or increases in value to help meet goals faster.
A sign company is planning to have an initial public offering (IPO). In which type of market will its stock
first be sold to the public?
- correct answer Primary market
What are the purposes of financial markets?
- correct answer To provide liquidity and determine prices
, In which financial market are securities such as stocks and bonds are traded after their initial issuance?
- correct answer Secondary market
What kind of market primarily allows institutions to borrow and lend in the short term?
- correct answer Money market
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?
- correct answer When a company issues stock for the first time to raise capital, shares must initially be
sold through a primary market.
Money Market
- correct answer A type of financial market that government and corporate entities use to borrow and
lend money in the short term (less than a year).
Capital Market
- correct answer More often used for long-term assets that are held for greater than one year (ex: stock
markets and bond markets).
What is the primary role of financial institutions?
- correct answer To conduct financial transactions such as investments, loans, and deposits.
Depository institution
- correct answer An institution that accepts and pays interest on deposits of money, as well as extends
loans (banks, credit unions).
Which financial institution ensures that a nation's economy remains healthy by controlling the amount
of money circulating in the economy?
- correct answer Central bank
How do insurance companies pay policyholders when a claim is made?
- correct answer They use returns from stocks and bonds.
