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WGU C214 FINANCIAL MANAGEMENT
PASS THE OA| ACTUAL QUESTIONS
AND ANSWERS 2026
The goal of using a financial derivative such as a forward or a future is to - correct-
answer -make no profits through exchange rate movements
What is the primary motive for tariffs - correct-answer -to protect domestic
industries
The purpose of currency restriction is what - correct-answer -to limit the ability of
a foreign firm to take capital outlay out of a country
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Accrual accounting is superior because - correct-answer -cash accounting can be
inaccurate since the receipt and disbursement of cash is frequently not
synchronized with operating variables
NOTE: in accrual accounting, revenues and expenses are recorded when they are
earned and project is complete- synchronized
When two rates are given in a word problem - correct-answer -the coupon rate
should be multiplied by FV
A simple interest problem formula is - correct-answer -simple interest = principle
* I/Y * number of years
Sensitivity rates analyze - correct-answer -the uncertainty of forecasted
assumptions regarding investment projects
NOTE: what makes the rate sensitive is the "uncertainty" & "assumption"
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I/Y can be described as - correct-answer -the rate of return, the yield, or the
interest rate
In the CAPM framework, why do investors hold the market portfolio - correct-
answer -any stock with higher expected returns relative to risk will converge to
the market portfolio
If no future value is given in a problem - correct-answer -assume FV is $1000 or
you are solving for FV
Accounts that vary directly with sales are called - correct-answer -spontaneous
accounts
NOTE: sales are almost always spontaneous; very seldom do we buy a new pair of
shoes because we planned to do so
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Characteristics of preferred stock includes - correct-answer --dividends in arrears
-dividends are cumulative
-higher payoff claim in a BK (has first dibs in a BK)
-considered "hybrid" (part stock/part bond)
-no fixed maturity date
-no voting rights
-can skip dividend payments
-dividends don't change year-after-year
-used in start ups (IPO)
Preferred stock dividends - correct-answer -can go without payment and pay in
arrears the following year
Characteristics of common stock are - correct-answer --voting rights
-no maturity date
-corporate governance
WGU C214 FINANCIAL MANAGEMENT
PASS THE OA| ACTUAL QUESTIONS
AND ANSWERS 2026
The goal of using a financial derivative such as a forward or a future is to - correct-
answer -make no profits through exchange rate movements
What is the primary motive for tariffs - correct-answer -to protect domestic
industries
The purpose of currency restriction is what - correct-answer -to limit the ability of
a foreign firm to take capital outlay out of a country
,2|Page
Accrual accounting is superior because - correct-answer -cash accounting can be
inaccurate since the receipt and disbursement of cash is frequently not
synchronized with operating variables
NOTE: in accrual accounting, revenues and expenses are recorded when they are
earned and project is complete- synchronized
When two rates are given in a word problem - correct-answer -the coupon rate
should be multiplied by FV
A simple interest problem formula is - correct-answer -simple interest = principle
* I/Y * number of years
Sensitivity rates analyze - correct-answer -the uncertainty of forecasted
assumptions regarding investment projects
NOTE: what makes the rate sensitive is the "uncertainty" & "assumption"
,3|Page
I/Y can be described as - correct-answer -the rate of return, the yield, or the
interest rate
In the CAPM framework, why do investors hold the market portfolio - correct-
answer -any stock with higher expected returns relative to risk will converge to
the market portfolio
If no future value is given in a problem - correct-answer -assume FV is $1000 or
you are solving for FV
Accounts that vary directly with sales are called - correct-answer -spontaneous
accounts
NOTE: sales are almost always spontaneous; very seldom do we buy a new pair of
shoes because we planned to do so
, 4|Page
Characteristics of preferred stock includes - correct-answer --dividends in arrears
-dividends are cumulative
-higher payoff claim in a BK (has first dibs in a BK)
-considered "hybrid" (part stock/part bond)
-no fixed maturity date
-no voting rights
-can skip dividend payments
-dividends don't change year-after-year
-used in start ups (IPO)
Preferred stock dividends - correct-answer -can go without payment and pay in
arrears the following year
Characteristics of common stock are - correct-answer --voting rights
-no maturity date
-corporate governance
