2026 WGU D076 FINANCE SKILLS FOR MANAGERS
FINAL EXAM|180QS&AS|A+GRADE
What is the primary difference between finance and accounting?
Finance focuses on the future, while accounting is generally backward-looking.
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?
ANS:->>>Making a financing decision
Rationale:->>>Since the project has already been approved, Hannah is trying
to find a way to finance the investment and considering its capital structure.
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?
ANS:->>>To maximize individual utility
While everyone has different personal financial goals, the objectives of such
goals is to maximize individual utility
,Which professional works with individuals to help them achieve their financial
goals?
ANS:->>>Financial planner
Professional financial planners work with individuals to help them achieve
their financial goals.
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?
ANS:->>>Financing a goal
He has already made a decision to purchase the car and is now deciding on
financing options.
What are the purposes of financial markets?
The purposes of financial markets are to provide liquidity and to determine
prices.
,In which financial market are securities such as stocks and bonds are traded
after their initial issuance?
ANS:->>>Secondary market
Financial securities are first sold in the primary financial market and then
traded among investors in the secondary financial market.
What kind of market primarily allows institutions to borrow and lend in the
short term?
ANS:->>>Money market
Assets in money markets are typically highly liquid and intended for use within
a year or less.
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?
ANS:->>>Primary market
, When a company issues stock for the first time to raise capital, shares must
initially be sold through a primary market.
What is a reasonable alternative to keeping an emergency stash of cash?
ANS:->>>Investing in a savings account
Investing in a readily withdrawable account that still earns some interest is a
value-preserving alternative.
About a year ago, the short-term Treasury bill had 1.54% interest and the long-
term Treasury note had 2.54% interest. This week, the 1-year Treasury bill has
an interest rate of 3.13%, while the 10-year Treasury note has an interest rate
of 2.28%. What does this information indicate about the future economy?
ANS:->>>It may indicate an economic downturn.
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?
ANS:->>>Business finance is the area of finance that deals with uses and
sources of funding to increase the value of the firm.
What is the primary role of financial institutions?
ANS:->>>To conduct financial transactions such as investments, loans, and
deposits
FINAL EXAM|180QS&AS|A+GRADE
What is the primary difference between finance and accounting?
Finance focuses on the future, while accounting is generally backward-looking.
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?
ANS:->>>Making a financing decision
Rationale:->>>Since the project has already been approved, Hannah is trying
to find a way to finance the investment and considering its capital structure.
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?
ANS:->>>To maximize individual utility
While everyone has different personal financial goals, the objectives of such
goals is to maximize individual utility
,Which professional works with individuals to help them achieve their financial
goals?
ANS:->>>Financial planner
Professional financial planners work with individuals to help them achieve
their financial goals.
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?
ANS:->>>Financing a goal
He has already made a decision to purchase the car and is now deciding on
financing options.
What are the purposes of financial markets?
The purposes of financial markets are to provide liquidity and to determine
prices.
,In which financial market are securities such as stocks and bonds are traded
after their initial issuance?
ANS:->>>Secondary market
Financial securities are first sold in the primary financial market and then
traded among investors in the secondary financial market.
What kind of market primarily allows institutions to borrow and lend in the
short term?
ANS:->>>Money market
Assets in money markets are typically highly liquid and intended for use within
a year or less.
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?
ANS:->>>Primary market
, When a company issues stock for the first time to raise capital, shares must
initially be sold through a primary market.
What is a reasonable alternative to keeping an emergency stash of cash?
ANS:->>>Investing in a savings account
Investing in a readily withdrawable account that still earns some interest is a
value-preserving alternative.
About a year ago, the short-term Treasury bill had 1.54% interest and the long-
term Treasury note had 2.54% interest. This week, the 1-year Treasury bill has
an interest rate of 3.13%, while the 10-year Treasury note has an interest rate
of 2.28%. What does this information indicate about the future economy?
ANS:->>>It may indicate an economic downturn.
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?
ANS:->>>Business finance is the area of finance that deals with uses and
sources of funding to increase the value of the firm.
What is the primary role of financial institutions?
ANS:->>>To conduct financial transactions such as investments, loans, and
deposits
