D367 Innovation in Finance OA Latest
Practice Test - 300 questions and correct
answers with rationales / WGU D367
Objective Assessment Practice test
review – Questions and Correct
Answers(newest
SECTION 1: FINTECH & FINANCIAL DISRUPTION (Questions
1-40)
1. What was the primary cause of the 2008 financial crisis?
• A. The stock market crash of 2008
• B. The housing bubble burst after loose lending terms, leading to
widespread mortgage defaults and a collapse in mortgage-backed securities
• C. The failure of major technology companies
• D. Government regulation of the banking industry
Rationale: The 2008 financial crisis was triggered by the collapse of the housing bubble
due to loose lending standards and subsequent defaults on subprime mortgages.
2. How did the financial collapse in 2008 lead to the emergence of fintechs?
• A. The government mandated the creation of fintech companies
• B. The collapse wrecked the financial system, and fintechs emerged as a
transformation of financial services
• C. Fintechs were developed to replace the Federal Reserve
• D. Traditional banks invested heavily in fintech startups
Rationale: The 2008 crisis damaged trust in traditional institutions and created a need
for innovation, paving the way for fintechs to disrupt the industry.
,3. Which societal benefit has online microfinance lending created?
• A. Urban businesses receive funding through streamlined online applications
• B. Entrepreneurs secure venture capital without needing investor meetings
• C. Small rural businesses gain access to financing without needing distant
physical bank branches
• D. Large corporations gain access to government subsidies without paperwork
Rationale: Online microfinance has extended financial access to rural areas and small
businesses that previously lacked traditional banking infrastructure.
4. How are fintechs contributing to societal change in Indonesia?
• A. They offer large loans to established corporations at low rates
• B. They have no office locations, a small staff, and volunteers, reducing
costs; they offer microlending to low-income entrepreneurs at much lower
interest rates than traditional lenders
• C. They provide free financial services to all citizens
• D. They distribute government subsidies to the poor
Rationale: Indonesian fintechs have reduced costs by operating without physical
branches, enabling microloans at lower rates to low-income entrepreneurs.
5. Which disruptor in the mortgage industry was brought on by the emergence of
fintechs?
• A. Blockchain-based mortgage verification
• B. P2P (peer-to-peer) lending — existed before, but fintech platforms
simplified and expanded the process
• C. AI-powered mortgage advisors
• D. Crowdfunding platforms
Rationale: Fintechs simplified and expanded peer-to-peer lending platforms, making
mortgage access more flexible and efficient.
6. Which term describes the reduction in sales of a company's own products due
to the introduction of another similar product?
• A. Interest cost
• B. Sunk costs
• C. Opportunity cost
• D. Cost of cannibalization
,Rationale: Cannibalization is the reduction in sales of a company's own products due to
the introduction of another similar product.
7. What happened in the 1960s that transformed the banking industry completely?
• A. The invention of the credit card
• B. The creation of the Federal Reserve
• C. IBM mainframe computers were introduced, leading to core banking
solutions and credit card processing systems
• D. The development of the internet
Rationale: IBM mainframe computers introduced in the 1960s revolutionized banking
by enabling faster transaction processing and credit card systems.
8. What is the main objective of personal financial goals?
• A. To maximize stock investments
• B. To maximize owner wealth
• C. To maximize charity donations
• D. To maximize individual utility
Rationale: Individuals set goals to increase satisfaction by taking care of necessities and
achieving priorities.
9. The introduction of the first smartphone in 2007 was a milestone for fintech.
What was the advantage of a smartphone over earlier technology?
• A. It was cheaper than earlier phones
• B. It had better camera quality
• C. Smartphones connected to the internet on the go, enabling fintech apps
anywhere with greater mobility
• D. It had longer battery life
Rationale: Smartphones brought mobile internet access, enabling fintech applications
anywhere with greater mobility.
10. Which cellphone advancement introduced text services and data
transmissions?
• A. 1G networks
• B. 2G networks — the first to support SMS and data services
• C. 3G networks
• D. 4G networks
, Rationale: 2G networks were the first to support SMS text services and data
transmissions.
11. Which technological development accelerated mobile POS payments?
• A. Wi-Fi technology
• B. Bluetooth technology
• C. NFC (near-field communication) technology — enabled secure tap-to-pay
transactions
• D. QR codes
Rationale: NFC technology enabled secure tap-to-pay transactions, accelerating mobile
POS payment adoption.
12. How have banks responded to clients using payment platforms outside the
bank to send money to friends and family?
• A. By banning external payment platforms
• B. By ignoring the trend
• C. By creating the banks' version of digital wallets to facilitate payments
• D. By increasing fees for external transfers
Rationale: Banks have responded to fintech payment competition by creating their own
digital wallet solutions.
13. How are fintech companies able to offer wealth management services to
individuals who are not high-net-worth individuals?
• A. By requiring large account minimums
• B. By charging high management fees
• C. By using low-cost digital channels for interaction
• D. By partnering with hedge funds
Rationale: Fintechs use low-cost digital channels to offer wealth management services
to individuals who would not qualify for traditional high-net-worth services.
14. What is the difference between fintech P2P payments and ACH payments?
• A. There is no difference
• B. P2P requires a bank intermediary, ACH does not
• C. ACH requires a bank intermediary for payments, while P2P allows direct
transfers without one
• D. P2P is slower than ACH
Practice Test - 300 questions and correct
answers with rationales / WGU D367
Objective Assessment Practice test
review – Questions and Correct
Answers(newest
SECTION 1: FINTECH & FINANCIAL DISRUPTION (Questions
1-40)
1. What was the primary cause of the 2008 financial crisis?
• A. The stock market crash of 2008
• B. The housing bubble burst after loose lending terms, leading to
widespread mortgage defaults and a collapse in mortgage-backed securities
• C. The failure of major technology companies
• D. Government regulation of the banking industry
Rationale: The 2008 financial crisis was triggered by the collapse of the housing bubble
due to loose lending standards and subsequent defaults on subprime mortgages.
2. How did the financial collapse in 2008 lead to the emergence of fintechs?
• A. The government mandated the creation of fintech companies
• B. The collapse wrecked the financial system, and fintechs emerged as a
transformation of financial services
• C. Fintechs were developed to replace the Federal Reserve
• D. Traditional banks invested heavily in fintech startups
Rationale: The 2008 crisis damaged trust in traditional institutions and created a need
for innovation, paving the way for fintechs to disrupt the industry.
,3. Which societal benefit has online microfinance lending created?
• A. Urban businesses receive funding through streamlined online applications
• B. Entrepreneurs secure venture capital without needing investor meetings
• C. Small rural businesses gain access to financing without needing distant
physical bank branches
• D. Large corporations gain access to government subsidies without paperwork
Rationale: Online microfinance has extended financial access to rural areas and small
businesses that previously lacked traditional banking infrastructure.
4. How are fintechs contributing to societal change in Indonesia?
• A. They offer large loans to established corporations at low rates
• B. They have no office locations, a small staff, and volunteers, reducing
costs; they offer microlending to low-income entrepreneurs at much lower
interest rates than traditional lenders
• C. They provide free financial services to all citizens
• D. They distribute government subsidies to the poor
Rationale: Indonesian fintechs have reduced costs by operating without physical
branches, enabling microloans at lower rates to low-income entrepreneurs.
5. Which disruptor in the mortgage industry was brought on by the emergence of
fintechs?
• A. Blockchain-based mortgage verification
• B. P2P (peer-to-peer) lending — existed before, but fintech platforms
simplified and expanded the process
• C. AI-powered mortgage advisors
• D. Crowdfunding platforms
Rationale: Fintechs simplified and expanded peer-to-peer lending platforms, making
mortgage access more flexible and efficient.
6. Which term describes the reduction in sales of a company's own products due
to the introduction of another similar product?
• A. Interest cost
• B. Sunk costs
• C. Opportunity cost
• D. Cost of cannibalization
,Rationale: Cannibalization is the reduction in sales of a company's own products due to
the introduction of another similar product.
7. What happened in the 1960s that transformed the banking industry completely?
• A. The invention of the credit card
• B. The creation of the Federal Reserve
• C. IBM mainframe computers were introduced, leading to core banking
solutions and credit card processing systems
• D. The development of the internet
Rationale: IBM mainframe computers introduced in the 1960s revolutionized banking
by enabling faster transaction processing and credit card systems.
8. What is the main objective of personal financial goals?
• A. To maximize stock investments
• B. To maximize owner wealth
• C. To maximize charity donations
• D. To maximize individual utility
Rationale: Individuals set goals to increase satisfaction by taking care of necessities and
achieving priorities.
9. The introduction of the first smartphone in 2007 was a milestone for fintech.
What was the advantage of a smartphone over earlier technology?
• A. It was cheaper than earlier phones
• B. It had better camera quality
• C. Smartphones connected to the internet on the go, enabling fintech apps
anywhere with greater mobility
• D. It had longer battery life
Rationale: Smartphones brought mobile internet access, enabling fintech applications
anywhere with greater mobility.
10. Which cellphone advancement introduced text services and data
transmissions?
• A. 1G networks
• B. 2G networks — the first to support SMS and data services
• C. 3G networks
• D. 4G networks
, Rationale: 2G networks were the first to support SMS text services and data
transmissions.
11. Which technological development accelerated mobile POS payments?
• A. Wi-Fi technology
• B. Bluetooth technology
• C. NFC (near-field communication) technology — enabled secure tap-to-pay
transactions
• D. QR codes
Rationale: NFC technology enabled secure tap-to-pay transactions, accelerating mobile
POS payment adoption.
12. How have banks responded to clients using payment platforms outside the
bank to send money to friends and family?
• A. By banning external payment platforms
• B. By ignoring the trend
• C. By creating the banks' version of digital wallets to facilitate payments
• D. By increasing fees for external transfers
Rationale: Banks have responded to fintech payment competition by creating their own
digital wallet solutions.
13. How are fintech companies able to offer wealth management services to
individuals who are not high-net-worth individuals?
• A. By requiring large account minimums
• B. By charging high management fees
• C. By using low-cost digital channels for interaction
• D. By partnering with hedge funds
Rationale: Fintechs use low-cost digital channels to offer wealth management services
to individuals who would not qualify for traditional high-net-worth services.
14. What is the difference between fintech P2P payments and ACH payments?
• A. There is no difference
• B. P2P requires a bank intermediary, ACH does not
• C. ACH requires a bank intermediary for payments, while P2P allows direct
transfers without one
• D. P2P is slower than ACH
