WGU - C214 FINANCIAL MANAGEMENT UPDATED ACTUAL QUESTIONS AND CORRECT ANSWERS

WGU - C214 FINANCIAL MANAGEMENT UPDATED
ACTUAL QUESTIONS AND CORRECT ANSWERS

Question:
1. True or False:
Answer:

Question:
2. True or False: Economics is a subfield of Finance
Answer:
False. Finance is a subfield of Economics.

Question:
3. Which of the following is not an example of firm capital?
a. Cash
b. Machinery
C. Labor
d. Financial Markets
Answer:
d. Financial Markets

Question:
4. True or False: Capital is defined as a financial asset.
Answer:
True. Capital is defined as a financial asset.

Question:
5. True or False: Corporate finance is devoted to understanding various types of financial instruments.
Answer:
False. Investments is devoted to understanding various types of financial instruments.

Question:
6. Which of the following is an example of firm capital?
a. Bank deposits
b. Cash
c. The firm's worth
d. None of these choices
Answer:
b. Cash

Question:
7. True or False: Corporate finance focuses on the decision-making of the firm's management.
Answer:
True. Corporate finance focuses on the decision making by the management of the firm.

,Question:
8. What are the three important areas of finance discussed in this section?
a. Corporate Finance, Investments, and Banking/financial institutions
b. Government Finance, WAAC, Ratios
c. Neither of these
Answer:
a. Corporate Finance, Investments, and Banking/financial institutions

Question:
9. True or False: Banks make money when interest rates they charge to borrowers are less than interest
rates they pay depositors.
Answer:
False. Banks make money when interest rates they charge to borrowers are MORE than interest rates they
pay depositors.

Question:
10. True or False: Stocks and bonds are two types of financial instruments.
Answer:
True. Stocks and bonds are two types of financial instruments.

Question:
11. True or False: Stock represents ownership in a particular company.
Answer:
True.

Question:
12. True or False: Companies can raise capital by issuing bonds or stocks.
Answer:
True

Question:
13. True or False: A stock is a debt instrument issued by corporations.
Answer:
False. A stock represents ownership in a company

Question:
14. True or False: A Treasury bond is a debt instrument issued by corporations.
Answer:
False. A Treasury bond is a debt instrument issued by governments.

Question:
15. True or False: A bond is a debt instrument issued by corporations or governments.
Answer:
True.

Question:
16. A stock is a share of ______________ in a particular company.

, Answer:
ownership

Question:
17. True or False: A bond is similar to a loan.
Answer:
True.

Question:
18. True or False: Primary financial markets are markets where issuers place new securities with investors.
Answer:
True.

Question:
19. True or False:What are the two ways a syndicate can place a bond?
a. A public initial sale
b. Competitive sale or negotiated sale
c. Only negotiated sale
d. Competitive sale or appreciative sale
Answer:
b. Competitive sale or negotiated sale

Question:
20. True or False: An IPO occurs on the primary market.
Answer:
True.

Question:
21. True or False: An IPO is a seasoned equity offering.
Answer:
False.

Question:
22. True or False: Syndicates are generally made up of investment banks and other institutional investors.
Answer:
True.

Question:
23. True or False: While competitive sales allow underwriters to submit bids to purchase bonds, negotiated
sales do not.
Answer:
False. Like a competitive sale, a negotiated sale is the process of underwriters submitting proposals,
including bids. However, this latter type of sale involves a more thorough interview process with the
underwriters. Further, the issuing firm will carefully select the management team to place these bonds.

Question:
24. True or False: NASDAQ is the world's largest secondary financial market.