Finance Skills for Managers - D076 Exam
Questions With Correct Answers
Accounting - CORRECT ANSWER✔✔-The system of recording, reporting,
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and summarizing past financial information and transactions.
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Accounts Receivable Turnover (AR Turnover) - CORRECT ANSWER✔✔-
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An activity ratio found by credit sales divided by accounts receivable.
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Activity Ratios - CORRECT ANSWER✔✔-A category of ratios that
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measure how well a company uses its assets to generate sales or cash,
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showing the firm's operational efficiency and profitability.
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Additional Funds Needed (AFN) - CORRECT ANSWER✔✔-Another name
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for the discretionary financing needed or external financing needed. It
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represents the additional financing needed given a firm's expectations
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for future growth.
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Affirmative Covenants - CORRECT ANSWER✔✔-A bond covenant that
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describes things the company pledges itself to do in order to protect
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bondholders.
,Agency Costs - CORRECT ANSWER✔✔-Costs that are incurred when
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management does not act in the best interest of shareholders.
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Agency Problem - CORRECT ANSWER✔✔-When the agent (the
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management) does not act in the best interest of the principal (the
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owners).
Aggressive Assets - CORRECT ANSWER✔✔-Companies or securities with
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beta greater than 1.
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Annual Percentage Rate - CORRECT ANSWER✔✔-The annual interest
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rate that is charged for borrowing money or that is earned through
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investment.
Annuity - CORRECT ANSWER✔✔-A stream of cash flows of an equal
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amount paid every consecutive period.
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Annuity Due - CORRECT ANSWER✔✔-A series of equal payments made
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at the beginning of consecutive periods.
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Asset Pricing - CORRECT ANSWER✔✔-The process of valuing assets.
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, Auction Market - CORRECT ANSWER✔✔-A secondary market with a
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physical location and where prices are determined by investors'
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willingness to pay. | |
Average Collection Period (ACP) - CORRECT ANSWER✔✔-An activity
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ratio found by the number of days in a year (365) divided by AR
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turnover.
Balance Sheet Forecasting - CORRECT ANSWER✔✔-Using sales growth
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and the profit forecast to construct a pro forma balance sheet to
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understand the future implications of the sources and uses of finances.
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Banks and Credit Unions - CORRECT ANSWER✔✔-Receive deposits and
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extend loans to individuals and businesses.
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Benchmarking - CORRECT ANSWER✔✔-The process of completing a | | | | | | | |
financial analysis to compare a firm's financial performance to that of
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other similar firms.
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Beta - CORRECT ANSWER✔✔-A variable that describes how the price of
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a security varies with the market.
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Questions With Correct Answers
Accounting - CORRECT ANSWER✔✔-The system of recording, reporting,
| | | | | | |
and summarizing past financial information and transactions.
| | | | | | |
Accounts Receivable Turnover (AR Turnover) - CORRECT ANSWER✔✔-
| | | | | | |
An activity ratio found by credit sales divided by accounts receivable.
| | | | | | | | | |
Activity Ratios - CORRECT ANSWER✔✔-A category of ratios that
| | | | | | | | |
measure how well a company uses its assets to generate sales or cash,
| | | | | | | | | | | | |
showing the firm's operational efficiency and profitability.
| | | | | |
Additional Funds Needed (AFN) - CORRECT ANSWER✔✔-Another name
| | | | | | | |
for the discretionary financing needed or external financing needed. It
| | | | | | | | | |
represents the additional financing needed given a firm's expectations
| | | | | | | | |
for future growth.
| |
Affirmative Covenants - CORRECT ANSWER✔✔-A bond covenant that
| | | | | | | |
describes things the company pledges itself to do in order to protect
| | | | | | | | | | | |
bondholders.
,Agency Costs - CORRECT ANSWER✔✔-Costs that are incurred when
| | | | | | | | |
management does not act in the best interest of shareholders.
| | | | | | | | |
Agency Problem - CORRECT ANSWER✔✔-When the agent (the
| | | | | | | |
management) does not act in the best interest of the principal (the
| | | | | | | | | | | |
owners).
Aggressive Assets - CORRECT ANSWER✔✔-Companies or securities with
| | | | | | |
beta greater than 1.
| | | |
Annual Percentage Rate - CORRECT ANSWER✔✔-The annual interest
| | | | | | | |
rate that is charged for borrowing money or that is earned through
| | | | | | | | | | | |
investment.
Annuity - CORRECT ANSWER✔✔-A stream of cash flows of an equal
| | | | | | | | | | |
amount paid every consecutive period.
| | | |
Annuity Due - CORRECT ANSWER✔✔-A series of equal payments made
| | | | | | | | | |
at the beginning of consecutive periods.
| | | | |
Asset Pricing - CORRECT ANSWER✔✔-The process of valuing assets.
| | | | | | | |
, Auction Market - CORRECT ANSWER✔✔-A secondary market with a
| | | | | | | | |
physical location and where prices are determined by investors'
| | | | | | | | |
willingness to pay. | |
Average Collection Period (ACP) - CORRECT ANSWER✔✔-An activity
| | | | | | | |
ratio found by the number of days in a year (365) divided by AR
| | | | | | | | | | | | | |
turnover.
Balance Sheet Forecasting - CORRECT ANSWER✔✔-Using sales growth
| | | | | | | |
and the profit forecast to construct a pro forma balance sheet to
| | | | | | | | | | | |
understand the future implications of the sources and uses of finances.
| | | | | | | | | |
Banks and Credit Unions - CORRECT ANSWER✔✔-Receive deposits and
| | | | | | | | |
extend loans to individuals and businesses.
| | | | |
Benchmarking - CORRECT ANSWER✔✔-The process of completing a | | | | | | | |
financial analysis to compare a firm's financial performance to that of
| | | | | | | | | | |
other similar firms.
| |
Beta - CORRECT ANSWER✔✔-A variable that describes how the price of
| | | | | | | | | | |
a security varies with the market.
| | | | |
