WGU C201 | BUSINESS ACUMEN |
CHAPTER 16 EXAM QUESTIONS AND
ANSWERS 2026
Stock - ANSWERSCorporations generate equity capital when they sell stock and when
stockholders actually own a piece of the corporation. Corporations may issue, common
stock, preferred stock, or convertible securities.
The primary market - ANSWERSMarkets in which new issues of securities are sold to
the public for the first time.
The secondary market - ANSWERSThese markets include the New York Stock
Exchange (NYSE), the American Stock Exchange (AMEX), NASDAQ, and regional and
foreign stock exchanges. In these secondary markets, securities are traded between
investors.
Understanding the financial system - ANSWERSHouseholds, businesses, government,
financial institutions, and financial markets together form what is known as the financial
system.
Securities - ANSWERSAlso called financial instruments, securities represent obligations
on the part of the issuers, businesses, and governments, to provide the purchasers with
expected or stated returns on the funds invested or loaned.
Money market instruments - ANSWERSShort-term debt securities issued by
corporations, financial institutions such as banks, and governments.
Bonds - ANSWERSBy selling bonds, the seller obtains long-term debt capital. Bonds
are sold by the U.S. Treasury, municipalities, and corporations.
Quality ratings for bonds - ANSWERSStandard & Poor's and Moody's rate corporate
and municipal bonds with regard to risk. Higher risk bonds must pay higher interest to
attract investors.
The New York Stock Exchange - ANSWERSThe NYSE or "Big Board" is the largest
secondary market in the world. It is where most of the largest, best-known U.S.
companies' stocks are traded. Trading involves face-to-face bidding between seated
traders at posts on the exchange floor.
The NASDAQ stock market - ANSWERSAlso known as the National Association of
Securities Dealers Automated Quotation system, it is a computerized communications
network where buy and sell orders are executed electronically.
CHAPTER 16 EXAM QUESTIONS AND
ANSWERS 2026
Stock - ANSWERSCorporations generate equity capital when they sell stock and when
stockholders actually own a piece of the corporation. Corporations may issue, common
stock, preferred stock, or convertible securities.
The primary market - ANSWERSMarkets in which new issues of securities are sold to
the public for the first time.
The secondary market - ANSWERSThese markets include the New York Stock
Exchange (NYSE), the American Stock Exchange (AMEX), NASDAQ, and regional and
foreign stock exchanges. In these secondary markets, securities are traded between
investors.
Understanding the financial system - ANSWERSHouseholds, businesses, government,
financial institutions, and financial markets together form what is known as the financial
system.
Securities - ANSWERSAlso called financial instruments, securities represent obligations
on the part of the issuers, businesses, and governments, to provide the purchasers with
expected or stated returns on the funds invested or loaned.
Money market instruments - ANSWERSShort-term debt securities issued by
corporations, financial institutions such as banks, and governments.
Bonds - ANSWERSBy selling bonds, the seller obtains long-term debt capital. Bonds
are sold by the U.S. Treasury, municipalities, and corporations.
Quality ratings for bonds - ANSWERSStandard & Poor's and Moody's rate corporate
and municipal bonds with regard to risk. Higher risk bonds must pay higher interest to
attract investors.
The New York Stock Exchange - ANSWERSThe NYSE or "Big Board" is the largest
secondary market in the world. It is where most of the largest, best-known U.S.
companies' stocks are traded. Trading involves face-to-face bidding between seated
traders at posts on the exchange floor.
The NASDAQ stock market - ANSWERSAlso known as the National Association of
Securities Dealers Automated Quotation system, it is a computerized communications
network where buy and sell orders are executed electronically.
