Finance Skills for Managers - D076 practice
test questions correctly defined a+
guaranteed.
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? - n
ANS✔
Business finance
Qs
What is the primary difference between finance and accounting? - n
ANS✔
Finance focuses on the future, while accounting is generally backward-looking.
Qs
Which subspecialty of finance primarily involves deciding which assets will create
more wealth and earn positive returns? - n
ANS✔
Investments
Qs
What is the primary goal of the financial manager of a firm? - n
ANS✔
To maximize owner wealth
Qs
What should be the main question a firm asks when considering any investment
decision? - n
ANS✔
Do the benefits of this investment outweigh the costs?
,Qs
What is the primary aim of personal finance goals? - n
ANS✔
To maximize satisfaction from products purchased and services obtained
Qs
Which task does a financial manager perform when choosing to obtain a loan to
purchase a piece of equipment for a new project? - n
ANS✔
Making financing decisions
Qs
Which financial career focuses on investing capital into firms whose shares are not
currently sold on any public stock exchange? - n
ANS✔
Private equity
Qs
Which task does a financial manager perform when assessing the costs and
benefits of potential projects? - n
ANS✔
Making investment decisions
Qs
What tool can you use to understand your overall personal cash flows? - n
ANS✔
Budgeting
Qs
What is a reasonable alternative to keeping an emergency stash of cash? - n
, ANS✔
Investing in a savings account
Qs
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? - n
ANS✔
Financing
Qs
What area of finance involves deciding which assets to invest in to create wealth in
the future? - n
ANS✔
Investments
Qs
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? - n
ANS✔
Making a financing decision
Qs
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? -
n
ANS✔
To maximize individual utility
, Qs
Which professional works with individuals to help them achieve their financial
goals? - n
ANS✔
Financial planner
Qs
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? - n
ANS✔
Financing a goal
Qs
What are the purposes of financial markets? - n
ANS✔
To provide liquidity and determine prices
Qs
In which financial market are securities such as stocks and bonds are traded after
their initial issuance? - n
ANS✔
Secondary market
Qs
What kind of market primarily allows institutions to borrow and lend in the short
term? - n
ANS✔
Money market
test questions correctly defined a+
guaranteed.
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? - n
ANS✔
Business finance
Qs
What is the primary difference between finance and accounting? - n
ANS✔
Finance focuses on the future, while accounting is generally backward-looking.
Qs
Which subspecialty of finance primarily involves deciding which assets will create
more wealth and earn positive returns? - n
ANS✔
Investments
Qs
What is the primary goal of the financial manager of a firm? - n
ANS✔
To maximize owner wealth
Qs
What should be the main question a firm asks when considering any investment
decision? - n
ANS✔
Do the benefits of this investment outweigh the costs?
,Qs
What is the primary aim of personal finance goals? - n
ANS✔
To maximize satisfaction from products purchased and services obtained
Qs
Which task does a financial manager perform when choosing to obtain a loan to
purchase a piece of equipment for a new project? - n
ANS✔
Making financing decisions
Qs
Which financial career focuses on investing capital into firms whose shares are not
currently sold on any public stock exchange? - n
ANS✔
Private equity
Qs
Which task does a financial manager perform when assessing the costs and
benefits of potential projects? - n
ANS✔
Making investment decisions
Qs
What tool can you use to understand your overall personal cash flows? - n
ANS✔
Budgeting
Qs
What is a reasonable alternative to keeping an emergency stash of cash? - n
, ANS✔
Investing in a savings account
Qs
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? - n
ANS✔
Financing
Qs
What area of finance involves deciding which assets to invest in to create wealth in
the future? - n
ANS✔
Investments
Qs
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? - n
ANS✔
Making a financing decision
Qs
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? -
n
ANS✔
To maximize individual utility
, Qs
Which professional works with individuals to help them achieve their financial
goals? - n
ANS✔
Financial planner
Qs
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? - n
ANS✔
Financing a goal
Qs
What are the purposes of financial markets? - n
ANS✔
To provide liquidity and determine prices
Qs
In which financial market are securities such as stocks and bonds are traded after
their initial issuance? - n
ANS✔
Secondary market
Qs
What kind of market primarily allows institutions to borrow and lend in the short
term? - n
ANS✔
Money market
