D076 Finance Skills for Managers
Question and answers verified to pass
2025/2026
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? - correct answer ✔Business finance
What is the primary difference between finance and accounting? - correct answer ✔Finance focuses on
the future, while accounting is generally backward-looking.
Which subspecialty of finance primarily involves deciding which assets will create more wealth and earn
positive returns? - correct answer ✔Investments
What is the primary goal of the financial manager of a firm? - correct answer ✔To maximize owner
wealth
What should be the main question a firm asks when considering any investment decision? - correct
answer ✔Do the benefits of this investment outweigh the costs?
What is the primary aim of personal finance goals? - correct answer ✔To maximize satisfaction from
products purchased and services obtained
Which task does a financial manager perform when choosing to obtain a loan to purchase a piece of
equipment for a new project? - correct answer ✔Making financing decisions
Which financial career focuses on investing capital into firms whose shares are not currently sold on any
public stock exchange? - correct answer ✔Private equity
,Which task does a financial manager perform when assessing the costs and benefits of potential
projects? - correct answer ✔Making investment decisions
What tool can you use to understand your overall personal cash flows? - correct answer ✔Budgeting
What is a reasonable alternative to keeping an emergency stash of cash? - correct answer ✔Investing in
a savings account
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? - correct answer
✔Financing
What area of finance involves deciding which assets to invest in to create wealth in the future? - correct
answer ✔Investments
Which professional works with individuals to help them achieve their financial goals? - correct answer
✔Financial planner
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? - correct answer ✔Making a financing decision
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? - correct answer ✔To maximize individual utility
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. - correct answer ✔Financing a goal
,What are the purposes of financial markets? - correct answer ✔To provide liquidity and determine
prices
In which financial market are securities such as stocks and bonds are traded after their initial issuance? -
correct answer ✔Secondary market
What kind of market primarily allows institutions to borrow and lend in the short term? - correct
answer ✔Money market
What is the primary role of financial institutions? - correct answer ✔To conduct financial transactions
such as investments, loans, and deposits
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? - correct answer
✔Primary market
What is a depository institution? - correct answer ✔An institution that accepts and pays interest on
deposits of money, as well as extends loans
Which financial institution ensures that a nation's economy remains healthy by controlling the amount
of money circulating in the economy? - correct answer ✔Central bank
How do insurance companies pay policyholders when a claim is made? - correct answer ✔They use
returns from stocks and bonds.
Which type of financial institution deals mainly with providing for retirement through employers? -
correct answer ✔Pension fund
, A large corporation is looking to merge with another large corporation. Which financial institution can
help them do this? - correct answer ✔Investment bank
Unemployment rate is which type of economic indicator? - correct answer ✔Lagging
What would an inverted yield curve signal? - correct answer ✔It may indicate an economic downturn.
The Federal Reserve sometimes adjusts the interest rate at which commercial banks can borrow from it.
What is the purpose of adjusting the interest rate? - correct answer ✔To regulate inflation and
unemployment
In what way are coincident indicators useful? - correct answer ✔They are analyzed during economic
shifts to provide information about the current state of the economy.
Which responsibility is a focus of the U.S. Securities and Exchange Commission? - correct answer ✔To
protect investors
Which type of financial institution provides individuals and firms access to financial markets? - correct
answer ✔Investment institutions
Which financial institution includes entities that receive money from institutional investors and wealthy
individuals to buy troubled companies to improve them and earn returns by selling them or going
public? - correct answer ✔Private equity
Yield curve is which type of economic indicator? - correct answer ✔Leading
Which term reflects a person's beliefs about right and wrong, good and bad, or just and unjust? - correct
answer ✔Moral
Question and answers verified to pass
2025/2026
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? - correct answer ✔Business finance
What is the primary difference between finance and accounting? - correct answer ✔Finance focuses on
the future, while accounting is generally backward-looking.
Which subspecialty of finance primarily involves deciding which assets will create more wealth and earn
positive returns? - correct answer ✔Investments
What is the primary goal of the financial manager of a firm? - correct answer ✔To maximize owner
wealth
What should be the main question a firm asks when considering any investment decision? - correct
answer ✔Do the benefits of this investment outweigh the costs?
What is the primary aim of personal finance goals? - correct answer ✔To maximize satisfaction from
products purchased and services obtained
Which task does a financial manager perform when choosing to obtain a loan to purchase a piece of
equipment for a new project? - correct answer ✔Making financing decisions
Which financial career focuses on investing capital into firms whose shares are not currently sold on any
public stock exchange? - correct answer ✔Private equity
,Which task does a financial manager perform when assessing the costs and benefits of potential
projects? - correct answer ✔Making investment decisions
What tool can you use to understand your overall personal cash flows? - correct answer ✔Budgeting
What is a reasonable alternative to keeping an emergency stash of cash? - correct answer ✔Investing in
a savings account
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? - correct answer
✔Financing
What area of finance involves deciding which assets to invest in to create wealth in the future? - correct
answer ✔Investments
Which professional works with individuals to help them achieve their financial goals? - correct answer
✔Financial planner
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? - correct answer ✔Making a financing decision
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? - correct answer ✔To maximize individual utility
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. - correct answer ✔Financing a goal
,What are the purposes of financial markets? - correct answer ✔To provide liquidity and determine
prices
In which financial market are securities such as stocks and bonds are traded after their initial issuance? -
correct answer ✔Secondary market
What kind of market primarily allows institutions to borrow and lend in the short term? - correct
answer ✔Money market
What is the primary role of financial institutions? - correct answer ✔To conduct financial transactions
such as investments, loans, and deposits
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? - correct answer
✔Primary market
What is a depository institution? - correct answer ✔An institution that accepts and pays interest on
deposits of money, as well as extends loans
Which financial institution ensures that a nation's economy remains healthy by controlling the amount
of money circulating in the economy? - correct answer ✔Central bank
How do insurance companies pay policyholders when a claim is made? - correct answer ✔They use
returns from stocks and bonds.
Which type of financial institution deals mainly with providing for retirement through employers? -
correct answer ✔Pension fund
, A large corporation is looking to merge with another large corporation. Which financial institution can
help them do this? - correct answer ✔Investment bank
Unemployment rate is which type of economic indicator? - correct answer ✔Lagging
What would an inverted yield curve signal? - correct answer ✔It may indicate an economic downturn.
The Federal Reserve sometimes adjusts the interest rate at which commercial banks can borrow from it.
What is the purpose of adjusting the interest rate? - correct answer ✔To regulate inflation and
unemployment
In what way are coincident indicators useful? - correct answer ✔They are analyzed during economic
shifts to provide information about the current state of the economy.
Which responsibility is a focus of the U.S. Securities and Exchange Commission? - correct answer ✔To
protect investors
Which type of financial institution provides individuals and firms access to financial markets? - correct
answer ✔Investment institutions
Which financial institution includes entities that receive money from institutional investors and wealthy
individuals to buy troubled companies to improve them and earn returns by selling them or going
public? - correct answer ✔Private equity
Yield curve is which type of economic indicator? - correct answer ✔Leading
Which term reflects a person's beliefs about right and wrong, good and bad, or just and unjust? - correct
answer ✔Moral
