Wgu D076 Finance Skills For Managers (Pa) Updated Questions And Correct Answers

WGU D076 FINANCE SKILLS FOR MANAGERS (PA)
UPDATED QUESTIONS AND CORRECT ANSWERS
Question:
1. FINANCIAL ENVIRONMENT In which way is accounting different from finance?
1. Accounting is backward looking, while finance is
focused on the future.
2. Accounting forecasts future performance, given the
past, while finance records past performance.
3. Accounting is focused on allocating capital, while
finance is focused on bringing in capital.
4. Accounting is about budgeting, saving, and borrow-
ing, while finance is about investing, forecasting, and lending.
Answer:
1. Accounting is backward
looking, while finance is focused on the future.

Question:
2. FINANCIAL ENVIRONMENT What is the main question that both individuals and companies
must consider when making financial deci-sions to reach a goal?
1. Will utility be maximized through this decision?
2. Will this decrease the amount of cash available?
3. Will this decision require debt or equity financing?
4. Will the benefits of the action outweigh the costs?
Answer:
3. Will this decision re-
quire debt or equity fi-nancing?

Question:
3. FINANCIAL ENVIRONMENT A financial manager at a company is trying to deter-mine whether
to issue new stocks or new bonds to cover the costs of a project the company is doing the next year.
Which main task in business finance is this situation an example of?
1. Making financing decisions
2. Managing working capital
3. Making investment decisions
4. Managing interdepartmental loans
Answer:
1. Making financing deci-
sions

Question:
4. FINANCIAL ENVIRONMENT How can investing help a person reach personal finan-cial goals?
1. It helps a person understand how money was spent
previously in order to reliably predict future expenses.
2. It ensures money is placed in a safe, risk-free, and
easily accessible financial asset.
3. It provides access to potential revenue or increases
in value to help meet goals faster.

, 4. It provides a guaranteed future outcome in order to
predictably meet financial goals.
Answer:
3. It provides access to po-
tential revenue or increas-es in value to help meet goals faster.

Question:
5. FINANCIAL ENVIRONMENT A sign company is planning to have an initial public offering
(IPO). In which type of market will its stock first be sold to the public?
1. Primary market
2. Efficient market
3. Secondary market
4. Money market
Answer:
1. Primary market

Question:
6. FINANCIAL ENVIRONMENT Which type of economic indicator changes after the economy
changes and helps identify trends in the long term?
1. Coincident indicator
2. Yield curve indicator
3. Lagging indicator
4. Leading indicator
Answer:
3. Lagging indicator

Question:
7. FINANCIAL ENVIRONMENT How does an investment institution, such as a mutual fund,
facilitate the circulation of money in the econo-my?
1. By raising capital on a contractual basis, such as an
insurance contract
2. By providing individuals and firms access to financial
markets to buy or sell financial securities
3. By insuring deposits in investment accounts up to
$250,000 to promote public confidence
4. By accepting deposits of money, paying interest on
deposits, and providing loans to individuals and orga-nizations
Answer:
2. By providing individuals
and firms access to finan-cial markets to buy or sell financial securities

Question:
8. FINANCIAL ENVIRONMENT Which type of economic indicator is used by govern-ments and
policymakers to implement or alter policies in an effort to avoid or minimize the effects of an
economic downturn?
1. Lagging indicator
2. Correlated indicator
3. Leading indicator

, 4. Coincident indicator
Answer:
3. Leading indicator

Question:
9. FINANCIAL ENVIRONMENT Suppose an individual does not eat chocolate because eating
chocolate goes against personal beliefs. Which type of standard is this?
1. Legal
2. Moral
3. Financial
4. Ethical
Answer:
2. Moral

Question:
10. FINANCIAL ENVIRONMENT Which action is based upon moral standards?
1. Although there is no company policy regarding it,
a financial manager chooses not to accept gifts from the company's clients to avoid creating a conflict
of interest.
2. As mandated by government regulations, a financial
manager files a registration statement with the U.S.
Securities and Exchange Commission (SEC) before of-fering equity securities for sale.
3. As outlined in the company's policies, a financial
manager hires a third-party entity to review all annual report filings to ensure they are compliant with
applic-able generally accepted accounting principles (GAAP).
4. Since it is generally accepted in the company that no
personal information about clients should be released without written permission, a financial manager
de-nies the request for a third party to access its data.
Answer:
1. Although there is no
company policy regard-ing it, a financial manager chooses not to accept gifts from the company's
clients to avoid creating a conflict of interest.

Question:
11. FINANCIAL ENVIRONMENT What should a potential bondholder (lender) do to prevent a
company (borrower) from taking on risky projects?
1. Release managers who do not attempt to maximize
immediate shareholder value
2. Encourage manipulation of accounting procedures
to optimize the company's profit
3. Set strict covenants that the company cannot uphold
if it chooses a risky project
4. Separate owners from management so their inter-
ests do not conflict
Answer:
3. Set strict covenants that
the company cannot up-hold if it chooses a risky project