D076 Finance Skills for Managers WGU
Exam Questions With Correct Answers
Real Return - CORRECT ANSWER✔✔-Rate of growth in purchasing
| | | | | | | | |
power of goods and services
| | | |
Holding Period Return - CORRECT ANSWER✔✔-Return over the entire
| | | | | | | | |
period that an investor owns a financial security
| | | | | | |
Beta - CORRECT ANSWER✔✔-A measure of the volatility, or systematic
| | | | | | | | | |
risk, of a security or a portfolio in comparison to the market as a whole.
| | | | | | | | | | | | | |
standard deviation - CORRECT ANSWER✔✔-Used to measure the total
| | | | | | | | |
risk of securities
| |
annuity due - CORRECT ANSWER✔✔-an annuity whose payments occur
| | | | | | | | |
at the beginning of each period, consecutively
| | | | | |
Par Bond - CORRECT ANSWER✔✔-When the bond's coupon rate equals
| | | | | | | | | |
the market yield;
| | |
Bonds are typically issued near par value
| | | | | |
, Pi - CORRECT ANSWER✔✔-Profitability index. At 1, the PI means a
| | | | | | | | | | |
internal return rate equal to the cost of capital
| | | | | | | |
Irr - CORRECT ANSWER✔✔-Internal rate of return (IRR) is a discount
| | | | | | | | | | |
rate at which the net present value (NPV) of an investment is equal to
| | | | | | | | | | | | | |
zero.
If the IRR is higher than the cost of borrowing to fund the investment,
| | | | | | | | | | | | | |
the investment should be profitable. Always shown as percentage.
| | | | | | | |
Net Present Value (NPV) - CORRECT ANSWER✔✔-A method of ranking
| | | | | | | | | |
investment proposals using the NPV, which is equal to the present value
| | | | | | | | | | | |
of the project's free cash flows discounted at the cost of capital. Shown
| | | | | | | | | | | | |
as dollar amount.. At $0 it means it will neither add nor subtract value.
| | | | | | | | | | | | |
Inventory Turnover - CORRECT ANSWER✔✔-An activity ratio found by
| | | | | | | | |
COGS divided by inventory | | |
dividends in arrears - CORRECT ANSWER✔✔-Feature of preferred stock
| | | | | | | | |
specifying that if a company ignores preferred stock dividends it cannot
| | | | | | | | | | |
pay anything to it's common stockholders
| | | | |
Agency Problem - CORRECT ANSWER✔✔-the possibility of conflict of
| | | | | | | | |
interest between the owners and management of a firm
| | | | | | | |
Exam Questions With Correct Answers
Real Return - CORRECT ANSWER✔✔-Rate of growth in purchasing
| | | | | | | | |
power of goods and services
| | | |
Holding Period Return - CORRECT ANSWER✔✔-Return over the entire
| | | | | | | | |
period that an investor owns a financial security
| | | | | | |
Beta - CORRECT ANSWER✔✔-A measure of the volatility, or systematic
| | | | | | | | | |
risk, of a security or a portfolio in comparison to the market as a whole.
| | | | | | | | | | | | | |
standard deviation - CORRECT ANSWER✔✔-Used to measure the total
| | | | | | | | |
risk of securities
| |
annuity due - CORRECT ANSWER✔✔-an annuity whose payments occur
| | | | | | | | |
at the beginning of each period, consecutively
| | | | | |
Par Bond - CORRECT ANSWER✔✔-When the bond's coupon rate equals
| | | | | | | | | |
the market yield;
| | |
Bonds are typically issued near par value
| | | | | |
, Pi - CORRECT ANSWER✔✔-Profitability index. At 1, the PI means a
| | | | | | | | | | |
internal return rate equal to the cost of capital
| | | | | | | |
Irr - CORRECT ANSWER✔✔-Internal rate of return (IRR) is a discount
| | | | | | | | | | |
rate at which the net present value (NPV) of an investment is equal to
| | | | | | | | | | | | | |
zero.
If the IRR is higher than the cost of borrowing to fund the investment,
| | | | | | | | | | | | | |
the investment should be profitable. Always shown as percentage.
| | | | | | | |
Net Present Value (NPV) - CORRECT ANSWER✔✔-A method of ranking
| | | | | | | | | |
investment proposals using the NPV, which is equal to the present value
| | | | | | | | | | | |
of the project's free cash flows discounted at the cost of capital. Shown
| | | | | | | | | | | | |
as dollar amount.. At $0 it means it will neither add nor subtract value.
| | | | | | | | | | | | |
Inventory Turnover - CORRECT ANSWER✔✔-An activity ratio found by
| | | | | | | | |
COGS divided by inventory | | |
dividends in arrears - CORRECT ANSWER✔✔-Feature of preferred stock
| | | | | | | | |
specifying that if a company ignores preferred stock dividends it cannot
| | | | | | | | | | |
pay anything to it's common stockholders
| | | | |
Agency Problem - CORRECT ANSWER✔✔-the possibility of conflict of
| | | | | | | | |
interest between the owners and management of a firm
| | | | | | | |
