Principles of Finance- D076 WGU
Question and answers rated A+
2025/2026
In which way is accounting different from finance? - correct answer ✔Accounting is backward looking,
while finance is focused on the future.
What is the main question that both individuals and companies must consider when making financial
decisions to reach a goal? - correct answer ✔Will the benefits of the action outweigh the costs?
A financial manager at a company is trying to determine whether to issue new stocks or new bonds to
cover the costs of a project the company is doing the next year.
Which main task in business finance is this situation an example of? - correct answer ✔Making
financing decisions
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
3
Which subspecialty of finance primarily involves deciding which assets will create more wealth and earn
positive returns? - correct answer ✔Investments
1
What is the primary goal of the financial manager of a firm? - correct answer ✔To maximize owner
wealth
3
,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 ✔The manager is deciding where to get the funds to
support a new project, which means the manager is making a financing decision.
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
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
How can investing help a person reach personal financial goals? - correct answer ✔It provides access to
potential revenue or increases in value to help meet goals faster.
A sign company is planning to have an initial public offering (IPO). In which type of market will its stock
first be sold to the public? - correct answer ✔Primary market
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
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
✔When a company issues stock for the first time to raise capital, shares must initially be sold through a
primary market.
Money Market - correct answer ✔A type of financial market that government and corporate entities
use to borrow and lend money in the short term (less than a year).
Capital Market - correct answer ✔More often used for long-term assets that are held for greater than
one year (ex: stock markets and bond markets).
What is the primary role of financial institutions? - correct answer ✔To conduct financial transactions
such as investments, loans, and deposits.
Depository institution - correct answer ✔An institution that accepts and pays interest on deposits of
money, as well as extends loans (banks, credit unions).
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.
A large corporation is looking to merge with another large corporation. Which financial institution can
help them do this? - correct answer ✔Investment bank
Question and answers rated A+
2025/2026
In which way is accounting different from finance? - correct answer ✔Accounting is backward looking,
while finance is focused on the future.
What is the main question that both individuals and companies must consider when making financial
decisions to reach a goal? - correct answer ✔Will the benefits of the action outweigh the costs?
A financial manager at a company is trying to determine whether to issue new stocks or new bonds to
cover the costs of a project the company is doing the next year.
Which main task in business finance is this situation an example of? - correct answer ✔Making
financing decisions
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
3
Which subspecialty of finance primarily involves deciding which assets will create more wealth and earn
positive returns? - correct answer ✔Investments
1
What is the primary goal of the financial manager of a firm? - correct answer ✔To maximize owner
wealth
3
,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 ✔The manager is deciding where to get the funds to
support a new project, which means the manager is making a financing decision.
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
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
How can investing help a person reach personal financial goals? - correct answer ✔It provides access to
potential revenue or increases in value to help meet goals faster.
A sign company is planning to have an initial public offering (IPO). In which type of market will its stock
first be sold to the public? - correct answer ✔Primary market
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
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
✔When a company issues stock for the first time to raise capital, shares must initially be sold through a
primary market.
Money Market - correct answer ✔A type of financial market that government and corporate entities
use to borrow and lend money in the short term (less than a year).
Capital Market - correct answer ✔More often used for long-term assets that are held for greater than
one year (ex: stock markets and bond markets).
What is the primary role of financial institutions? - correct answer ✔To conduct financial transactions
such as investments, loans, and deposits.
Depository institution - correct answer ✔An institution that accepts and pays interest on deposits of
money, as well as extends loans (banks, credit unions).
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.
A large corporation is looking to merge with another large corporation. Which financial institution can
help them do this? - correct answer ✔Investment bank
