WGU D775 BUSINESS FINANCE OA
CERTIFICATION SCRIPT 2026 QUESTIONS
WITH SOLUTIONS GRADED A+
◍ Insurance Financial Institution.
Answer: A company that helps protect you from big financial losses when
something bad happens - Life insurance, property insurance, etc.
◍ Corporate Social Responsibility.
Answer: When a company does more than just try to make money - it also
makes an effort to do good things for people, society, and the environment.
◍ Which factor would increase a firm's cost of debt?.
Answer: Unpredictable revenue forecasts
◍ Which type of investment vehicle is uniquely used for retirement savings?.
Answer: 401k plans
◍ The Big Formula.
Answer: Assets = Liabilities + Equity
◍ What does a high accounts receivable turnover rate indicate?.
Answer: Frequent receivables collection
◍ What change would reduce monthly loan payments if they're unaffordable?.
Answer: Extend the repayment period
◍ Why include the initial investment in an NPV calculation?.
Answer: To compare upfront costs to the discounted value of future cash
inflows
◍ Types of Financial Institutions.
Answer: Depository, Investment, Insurance, Pension Funds
,◍ What is a characteristic of preferred stock?.
Answer: Fixed dividends
◍ What is a role of financial regulators?.
Answer: Ensuring fair and transparent markets
◍ Loan.
Answer: When you borrow money from, a bank or person and pay it back
later with interest
◍ Private Financial Market.
Answer: A place where financial products are bought and sold privately,
usually among a small group of investors, rather than the general public.
◍ What principle guides business finance to optimize resource use?.
Answer: Risk-return trade-off
◍ Why do entrepreneurs keep low D/E ratios in start-ups?.
Answer: Equity is less risky than debt for a start-up
◍ Which finance activity involves the creation, circulation, and management
of money?.
Answer: Setting monetary policy
◍ Why do companies use market ratios?.
Answer: To analyze stock value
◍ What does a high average collection period indicate?.
Answer: A slow conversion of receivables to cash
◍ What does DFN of $50,000 indicate?.
Answer: The company must raise $50,000 in additional capital to fund
operations/investments
◍ What should management do to finance a venture at the lowest cost when
leverage ratios are favorable?.
Answer: Use debt, because debt is typically less expensive
◍ Business Finance.
, Answer: Involves using financial data to make decisions, evaluate
investment projects, and determine the best way to finance those projects.
◍ How do interest payments offer tax advantages?.
Answer: They reduce taxable income
◍ Accounting.
Answer: The process of keeping track of money, where it comes from,,
where it goes, and how much you have
◍ Capital Raising.
Answer: Getting the money to start, run and grow a business.
◍ What is the time orientation of financial decision-making in business
finance?.
Answer: Future projections and planning
◍ Public Finance.
Answer: How the government collects and spends money
◍ Public Financial Market.
Answer: A place where anyone can buy and sell financial products like
stocks and bonds openly and legally.
◍ Balance Sheet.
Answer: Snapshot of a business's financial health at a specific point in time,
what the business owns, owes, and what is left for the owner.
◍ Market Sentiment.
Answer: The overall mood or feeling of investors about the stock market (or
a specific stock).
◍ What is a futures contract as a financial derivative?.
Answer: A standardized contract to buy or sell an asset at a specified future
date and price
◍ What distinguishes hedge funds from mutual funds?.
Answer: They employ diverse strategies and are available to sophisticated
investors
CERTIFICATION SCRIPT 2026 QUESTIONS
WITH SOLUTIONS GRADED A+
◍ Insurance Financial Institution.
Answer: A company that helps protect you from big financial losses when
something bad happens - Life insurance, property insurance, etc.
◍ Corporate Social Responsibility.
Answer: When a company does more than just try to make money - it also
makes an effort to do good things for people, society, and the environment.
◍ Which factor would increase a firm's cost of debt?.
Answer: Unpredictable revenue forecasts
◍ Which type of investment vehicle is uniquely used for retirement savings?.
Answer: 401k plans
◍ The Big Formula.
Answer: Assets = Liabilities + Equity
◍ What does a high accounts receivable turnover rate indicate?.
Answer: Frequent receivables collection
◍ What change would reduce monthly loan payments if they're unaffordable?.
Answer: Extend the repayment period
◍ Why include the initial investment in an NPV calculation?.
Answer: To compare upfront costs to the discounted value of future cash
inflows
◍ Types of Financial Institutions.
Answer: Depository, Investment, Insurance, Pension Funds
,◍ What is a characteristic of preferred stock?.
Answer: Fixed dividends
◍ What is a role of financial regulators?.
Answer: Ensuring fair and transparent markets
◍ Loan.
Answer: When you borrow money from, a bank or person and pay it back
later with interest
◍ Private Financial Market.
Answer: A place where financial products are bought and sold privately,
usually among a small group of investors, rather than the general public.
◍ What principle guides business finance to optimize resource use?.
Answer: Risk-return trade-off
◍ Why do entrepreneurs keep low D/E ratios in start-ups?.
Answer: Equity is less risky than debt for a start-up
◍ Which finance activity involves the creation, circulation, and management
of money?.
Answer: Setting monetary policy
◍ Why do companies use market ratios?.
Answer: To analyze stock value
◍ What does a high average collection period indicate?.
Answer: A slow conversion of receivables to cash
◍ What does DFN of $50,000 indicate?.
Answer: The company must raise $50,000 in additional capital to fund
operations/investments
◍ What should management do to finance a venture at the lowest cost when
leverage ratios are favorable?.
Answer: Use debt, because debt is typically less expensive
◍ Business Finance.
, Answer: Involves using financial data to make decisions, evaluate
investment projects, and determine the best way to finance those projects.
◍ How do interest payments offer tax advantages?.
Answer: They reduce taxable income
◍ Accounting.
Answer: The process of keeping track of money, where it comes from,,
where it goes, and how much you have
◍ Capital Raising.
Answer: Getting the money to start, run and grow a business.
◍ What is the time orientation of financial decision-making in business
finance?.
Answer: Future projections and planning
◍ Public Finance.
Answer: How the government collects and spends money
◍ Public Financial Market.
Answer: A place where anyone can buy and sell financial products like
stocks and bonds openly and legally.
◍ Balance Sheet.
Answer: Snapshot of a business's financial health at a specific point in time,
what the business owns, owes, and what is left for the owner.
◍ Market Sentiment.
Answer: The overall mood or feeling of investors about the stock market (or
a specific stock).
◍ What is a futures contract as a financial derivative?.
Answer: A standardized contract to buy or sell an asset at a specified future
date and price
◍ What distinguishes hedge funds from mutual funds?.
Answer: They employ diverse strategies and are available to sophisticated
investors
