WGU D775 INTRO TO BUSINESS FINANCE
COMPREHENSIVE EXAMINATION TEST 2026
COMPLETE QUESTIONS AND ANSWERS.
◍ Function of financial markets?.Answer:Facilitate the flow of
capital from savers to borrowers.
◍ Role of investment banks in the primary
market?.Answer:Underwrite new issues and set the offering price.
◍ What is an auction market?.Answer:Market where price is set by
highest bid and lowest ask.
◍ Purpose of the primary market?.Answer:Issue new securities and
raise capital for issuers.
◍ Role of major exchanges like LSE?.Answer:Facilitate trading and
support global capital formation.
◍ Role of financial institutions in the economy?.Answer:Facilitating
the flow of funds.
◍ Function of investment banks?.Answer:Underwriting new security
issues.
,◍ Function of pension funds?.Answer:Managing retirement savings
for individuals.
◍ Potential disadvantage of public equity raising?.Answer:Significant
regulatory requirements and scrutiny.
◍ What does an inverted yield curve predict?.Answer:Economic
recession.
◍ Primary focus of ethics in finance?.Answer:Guiding moral
principles and standards in financial behavior.
◍ How can companies address agency problems?.Answer:Implement
strong governance structures.
◍ Activity in finance that supports sustainability
goals?.Answer:Mitigating effects of economic activities on the natural
environment.
◍ Key ethical failure in subprime mortgage crisis?.Answer:Issuing
high-risk loans to borrowers with poor credit.
◍ Why is offshoring sometimes contentious?.Answer:It can exploit
vulnerable workers.
, ◍ Purpose of ratio analysis in business finance?.Answer:To manage
and assess business performance.
◍ Main objective of business finance in projects?.Answer:Evaluating
and selecting profitable projects.
◍ Benefit of investing in funds?.Answer:Diversification through
professional management.
◍ Primary advantage of professional management in
funds?.Answer:Benefit from expert investment decisions.
◍ Key characteristic of municipal bonds?.Answer:Exempt from
federal and state taxes.
◍ Main function of the NYSE?.Answer:Operate as an auction market
for securities.
◍ Advantage of centralized trading in auction
markets?.Answer:Transparent price discovery process.
◍ Asset classes pension funds invest in?.Answer:Stocks, bonds, real
estate, private equity.
◍ What does CPI measure?.Answer:Price level changes of a market
basket of consumer goods/services.
COMPREHENSIVE EXAMINATION TEST 2026
COMPLETE QUESTIONS AND ANSWERS.
◍ Function of financial markets?.Answer:Facilitate the flow of
capital from savers to borrowers.
◍ Role of investment banks in the primary
market?.Answer:Underwrite new issues and set the offering price.
◍ What is an auction market?.Answer:Market where price is set by
highest bid and lowest ask.
◍ Purpose of the primary market?.Answer:Issue new securities and
raise capital for issuers.
◍ Role of major exchanges like LSE?.Answer:Facilitate trading and
support global capital formation.
◍ Role of financial institutions in the economy?.Answer:Facilitating
the flow of funds.
◍ Function of investment banks?.Answer:Underwriting new security
issues.
,◍ Function of pension funds?.Answer:Managing retirement savings
for individuals.
◍ Potential disadvantage of public equity raising?.Answer:Significant
regulatory requirements and scrutiny.
◍ What does an inverted yield curve predict?.Answer:Economic
recession.
◍ Primary focus of ethics in finance?.Answer:Guiding moral
principles and standards in financial behavior.
◍ How can companies address agency problems?.Answer:Implement
strong governance structures.
◍ Activity in finance that supports sustainability
goals?.Answer:Mitigating effects of economic activities on the natural
environment.
◍ Key ethical failure in subprime mortgage crisis?.Answer:Issuing
high-risk loans to borrowers with poor credit.
◍ Why is offshoring sometimes contentious?.Answer:It can exploit
vulnerable workers.
, ◍ Purpose of ratio analysis in business finance?.Answer:To manage
and assess business performance.
◍ Main objective of business finance in projects?.Answer:Evaluating
and selecting profitable projects.
◍ Benefit of investing in funds?.Answer:Diversification through
professional management.
◍ Primary advantage of professional management in
funds?.Answer:Benefit from expert investment decisions.
◍ Key characteristic of municipal bonds?.Answer:Exempt from
federal and state taxes.
◍ Main function of the NYSE?.Answer:Operate as an auction market
for securities.
◍ Advantage of centralized trading in auction
markets?.Answer:Transparent price discovery process.
◍ Asset classes pension funds invest in?.Answer:Stocks, bonds, real
estate, private equity.
◍ What does CPI measure?.Answer:Price level changes of a market
basket of consumer goods/services.
