WGU D076 questions with verified answers
5% Ans✓✓✓-The nominal interest rate of an investment is 8%, and the inflation
rate is 3%. What is the real interest rate?
A 30-year mortgage Ans✓✓✓-You are considering purchasing a house for
$250,000. You have two options to finance it. One is a 20-year mortgage with an
interest rate of 3.5%, and the other is a 30-year mortgage with an interest rate of
3.5%. Which mortgage option requires you to pay more in total interest?
Accepting a wide variety of deposits, offering investment products, providing
loans, and brokering financial transactions Ans✓✓✓-What are the main services
offered by financial institutions?
Accounting Ans✓✓✓-The system of recording, reporting, and summarizing past
financial information and transactions.
Accounts Receivable Turnover (AR Turnover) Ans✓✓✓-An activity ratio found by
credit sales divided by accounts receivable.
Activity Ratios Ans✓✓✓-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) Ans✓✓✓-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 Ans✓✓✓-A bond covenant that describes things the
company pledges itself to do in order to protect bondholders.Go To
Agency Costs Ans✓✓✓-Costs that are incurred when management does not act
in the best interest of shareholders.
Agency Problem Ans✓✓✓-When the agent (the management) does not act in the
best interest of the principal (the owners).Go To
Agency problem due to conflicting interests Ans✓✓✓-A company's officers and
board of directors are selling their stocks in the firm at higher prices due to false
accounting reports that made the stock seem more valuable than it truly was.
Which ethical issue is occurring in this situation?
Aggressive Assets Ans✓✓✓-Companies or securities with beta greater than 1.
Aligning managers' interests with shareholders' interests Ans✓✓✓-How can
agency costs be mitigated?
An action that is in accordance with the laws and rules set by an authority.
Ans✓✓✓-What does the term legal describe?
An ethical action is based on accepted standards of conduct. Ans✓✓✓-What
characterizes an ethical action?
An institution that accepts and pays interest on deposits of money, as well as
extends loans Ans✓✓✓-What is a depository institution?
,An ordinary annuity Ans✓✓✓-You signed an apartment contract today. You are
going to pay $1,500 at the beginning of each month for the next 12 months,
starting today. What type of cash flows is this contract?
An unexpected change in interest rate occurs. Ans✓✓✓-Which example below is
considered a market risk factor?
Annual Percentage Rate Ans✓✓✓-The annual interest rate that is charged for
borrowing money or that is earned through investment.
Annual percentage rate Ans✓✓✓-What is the name for the interest rate
expressed on an annual basis?
Annuity Ans✓✓✓-A stream of cash flows of an equal amount paid every
consecutive period.Go To
Annuity Due Ans✓✓✓-A series of equal payments made at the beginning of
consecutive periods.Go To
Asset Pricing Ans✓✓✓-The process of valuing assets.
Auction Market Ans✓✓✓-A secondary market with a physical location and where
prices are determined by investors' willingness to pay.Go To
Average Collection Period (ACP) Ans✓✓✓-An activity ratio found by the number
of days in a year (365) divided by AR turnover.Go To
, Balance Sheet Forecasting Ans✓✓✓-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 Ans✓✓✓-Receive deposits and extend loans to
individuals and businesses.
Because the benefits of investments received at different times are comparable
only when you consider the time value of money Ans✓✓✓-Why does the time
value of money play an important role in financial decision-making?
Benchmarking Ans✓✓✓-The process of completing a financial analysis to
compare a firm's financial performance to that of other similar firms.
Beta Ans✓✓✓-A variable that describes how the price of a security varies with
the market.
Bid-ask Spread Ans✓✓✓-The difference between the bid and ask prices that
compensate the specialist for the risk that he or she bears for willingness to
provide liquidity.
Board of Directors Ans✓✓✓-A group of people who jointly supervise the
activities of an organization.
Bond Indenture Ans✓✓✓-A legal contract that governs the relationship between
a firm and its bondholders.Go To
5% Ans✓✓✓-The nominal interest rate of an investment is 8%, and the inflation
rate is 3%. What is the real interest rate?
A 30-year mortgage Ans✓✓✓-You are considering purchasing a house for
$250,000. You have two options to finance it. One is a 20-year mortgage with an
interest rate of 3.5%, and the other is a 30-year mortgage with an interest rate of
3.5%. Which mortgage option requires you to pay more in total interest?
Accepting a wide variety of deposits, offering investment products, providing
loans, and brokering financial transactions Ans✓✓✓-What are the main services
offered by financial institutions?
Accounting Ans✓✓✓-The system of recording, reporting, and summarizing past
financial information and transactions.
Accounts Receivable Turnover (AR Turnover) Ans✓✓✓-An activity ratio found by
credit sales divided by accounts receivable.
Activity Ratios Ans✓✓✓-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) Ans✓✓✓-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 Ans✓✓✓-A bond covenant that describes things the
company pledges itself to do in order to protect bondholders.Go To
Agency Costs Ans✓✓✓-Costs that are incurred when management does not act
in the best interest of shareholders.
Agency Problem Ans✓✓✓-When the agent (the management) does not act in the
best interest of the principal (the owners).Go To
Agency problem due to conflicting interests Ans✓✓✓-A company's officers and
board of directors are selling their stocks in the firm at higher prices due to false
accounting reports that made the stock seem more valuable than it truly was.
Which ethical issue is occurring in this situation?
Aggressive Assets Ans✓✓✓-Companies or securities with beta greater than 1.
Aligning managers' interests with shareholders' interests Ans✓✓✓-How can
agency costs be mitigated?
An action that is in accordance with the laws and rules set by an authority.
Ans✓✓✓-What does the term legal describe?
An ethical action is based on accepted standards of conduct. Ans✓✓✓-What
characterizes an ethical action?
An institution that accepts and pays interest on deposits of money, as well as
extends loans Ans✓✓✓-What is a depository institution?
,An ordinary annuity Ans✓✓✓-You signed an apartment contract today. You are
going to pay $1,500 at the beginning of each month for the next 12 months,
starting today. What type of cash flows is this contract?
An unexpected change in interest rate occurs. Ans✓✓✓-Which example below is
considered a market risk factor?
Annual Percentage Rate Ans✓✓✓-The annual interest rate that is charged for
borrowing money or that is earned through investment.
Annual percentage rate Ans✓✓✓-What is the name for the interest rate
expressed on an annual basis?
Annuity Ans✓✓✓-A stream of cash flows of an equal amount paid every
consecutive period.Go To
Annuity Due Ans✓✓✓-A series of equal payments made at the beginning of
consecutive periods.Go To
Asset Pricing Ans✓✓✓-The process of valuing assets.
Auction Market Ans✓✓✓-A secondary market with a physical location and where
prices are determined by investors' willingness to pay.Go To
Average Collection Period (ACP) Ans✓✓✓-An activity ratio found by the number
of days in a year (365) divided by AR turnover.Go To
, Balance Sheet Forecasting Ans✓✓✓-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 Ans✓✓✓-Receive deposits and extend loans to
individuals and businesses.
Because the benefits of investments received at different times are comparable
only when you consider the time value of money Ans✓✓✓-Why does the time
value of money play an important role in financial decision-making?
Benchmarking Ans✓✓✓-The process of completing a financial analysis to
compare a firm's financial performance to that of other similar firms.
Beta Ans✓✓✓-A variable that describes how the price of a security varies with
the market.
Bid-ask Spread Ans✓✓✓-The difference between the bid and ask prices that
compensate the specialist for the risk that he or she bears for willingness to
provide liquidity.
Board of Directors Ans✓✓✓-A group of people who jointly supervise the
activities of an organization.
Bond Indenture Ans✓✓✓-A legal contract that governs the relationship between
a firm and its bondholders.Go To
