1
C214 WGU Study Guide 2025/2026 Exam
Questions and Answers | A+ Score
Assured
Financial Securities (3 types) - 🧠 ANSWER ✔✔1. Gov Securities(treasury bonds)-
gov invest in natl defense to freeways. Loans provide by the public to gov. When
tax revs fall short to cover expenditures, gov issues bonds from 60 days-30yrs.
2. Corporate Bonds- Google might be looking to invest another $50 billion in low-
orbiting satellites; however, because of its size, the company cannot walk into a
local bank hoping for a $50-billion loan. Instead, Google will likely issue bonds
with a face value of $1,000 that make one or two annual coupon payments a year
and might be paid back over a 20-year period.
Corporate finance is NOT devoted to understanding various types of financial
instruments; investments are. *Corporate finance focuses on the decision making
by the management of the firm.
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STATEMENT. ALL RIGHTS RESERVED
,2
3. Stocks- share of ownership in a co. If Google did not want to borrow money
from bondholders to finance the $50-billion low-orbiting satellite project, Google
could sell shares of ownership in the company.
Syndicate - 🧠 ANSWER ✔✔is a group that is temporarily formed to handle a bond
or stock issue. Syndicates are generally made up of large investment banks or other
types of institutional investors. These large investment banks that make up a
syndicate might also be the underwriters of the security issue. An underwriter has
the responsibility of determining the value of the security and then, in some cases,
the underwriter will purchase all of the securities from the issuer and then sell them
to other investors.
Two ways a firm issuing a bond can place the bonds with a syndicate:
1. Competitive Sale- Those wishing to underwrite the bond issue will submit bids
(on bond's prices and interest rate) to the issuing firm. Firm will then select the
underwriter that offered the highest price and lowest interest rate. Underwriter will
sell bonds to various investors at (hopefully) a slightly higher price than purchase
price.
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STATEMENT. ALL RIGHTS RESERVED
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2. Negotiated Sale- like the 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 that will place these bonds.
Primary Markets (Stocks & Bonds) - 🧠 ANSWER ✔✔The primary market for
stock issuance works in a similar way to the bond primary market. However, some
terminology is different. A firm that is going public (or selling shares of ownership
for the first time) is going to perform an initial public offering (IPO). These IPOs
are sometimes called new equity offerings. However, much of the underwriting
occurs in a similar manner, which we have discussed above.
Secondary Markets (2 types) - 🧠 ANSWER ✔✔1. Auction Market- an auction
financial market has a physical location and prices are determined by the highest
price an investor is willing to pay. The New York Stock Exchange (NYSE), the
world's largest secondary financial market. NYSE has a single dealer that provides
liquidity.
*Some high frequency traders provide liquidity to the rest of the market.
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STATEMENT. ALL RIGHTS RESERVED
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*If providing liquidity becomes more risky, then dealers will increase the spread.
*If the price of a particular stock begins to heavily fluctuate, then the specialist will
INCREASE the spread.
2. Dealer market- does not require a physical location. Securities are bought and
sold through a network of dealers that trade for themselves. a dealer might hold
inventory for particular stock and willing to sell to those that demand the stock and
buy from those that will supply the stock. NASDAQ, (second-largest secondary
market worldly), is example of a dealer market. Most stocks that are listed on
NASDAQ have multiple dealers for each. The idea behind having multiple dealers
providing liquidity to investors is that the dealers must compete with one another,
thus lowering the cost of transacting.
Spread - 🧠 ANSWER ✔✔The difference between the bid price and the ask price.
If the price of a particular stock begins to heavily fluctuate, then the specialist will
INCREASE the spread.
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
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STATEMENT. ALL RIGHTS RESERVED
C214 WGU Study Guide 2025/2026 Exam
Questions and Answers | A+ Score
Assured
Financial Securities (3 types) - 🧠 ANSWER ✔✔1. Gov Securities(treasury bonds)-
gov invest in natl defense to freeways. Loans provide by the public to gov. When
tax revs fall short to cover expenditures, gov issues bonds from 60 days-30yrs.
2. Corporate Bonds- Google might be looking to invest another $50 billion in low-
orbiting satellites; however, because of its size, the company cannot walk into a
local bank hoping for a $50-billion loan. Instead, Google will likely issue bonds
with a face value of $1,000 that make one or two annual coupon payments a year
and might be paid back over a 20-year period.
Corporate finance is NOT devoted to understanding various types of financial
instruments; investments are. *Corporate finance focuses on the decision making
by the management of the firm.
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
1
STATEMENT. ALL RIGHTS RESERVED
,2
3. Stocks- share of ownership in a co. If Google did not want to borrow money
from bondholders to finance the $50-billion low-orbiting satellite project, Google
could sell shares of ownership in the company.
Syndicate - 🧠 ANSWER ✔✔is a group that is temporarily formed to handle a bond
or stock issue. Syndicates are generally made up of large investment banks or other
types of institutional investors. These large investment banks that make up a
syndicate might also be the underwriters of the security issue. An underwriter has
the responsibility of determining the value of the security and then, in some cases,
the underwriter will purchase all of the securities from the issuer and then sell them
to other investors.
Two ways a firm issuing a bond can place the bonds with a syndicate:
1. Competitive Sale- Those wishing to underwrite the bond issue will submit bids
(on bond's prices and interest rate) to the issuing firm. Firm will then select the
underwriter that offered the highest price and lowest interest rate. Underwriter will
sell bonds to various investors at (hopefully) a slightly higher price than purchase
price.
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
2
STATEMENT. ALL RIGHTS RESERVED
,3
2. Negotiated Sale- like the 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 that will place these bonds.
Primary Markets (Stocks & Bonds) - 🧠 ANSWER ✔✔The primary market for
stock issuance works in a similar way to the bond primary market. However, some
terminology is different. A firm that is going public (or selling shares of ownership
for the first time) is going to perform an initial public offering (IPO). These IPOs
are sometimes called new equity offerings. However, much of the underwriting
occurs in a similar manner, which we have discussed above.
Secondary Markets (2 types) - 🧠 ANSWER ✔✔1. Auction Market- an auction
financial market has a physical location and prices are determined by the highest
price an investor is willing to pay. The New York Stock Exchange (NYSE), the
world's largest secondary financial market. NYSE has a single dealer that provides
liquidity.
*Some high frequency traders provide liquidity to the rest of the market.
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
3
STATEMENT. ALL RIGHTS RESERVED
, 4
*If providing liquidity becomes more risky, then dealers will increase the spread.
*If the price of a particular stock begins to heavily fluctuate, then the specialist will
INCREASE the spread.
2. Dealer market- does not require a physical location. Securities are bought and
sold through a network of dealers that trade for themselves. a dealer might hold
inventory for particular stock and willing to sell to those that demand the stock and
buy from those that will supply the stock. NASDAQ, (second-largest secondary
market worldly), is example of a dealer market. Most stocks that are listed on
NASDAQ have multiple dealers for each. The idea behind having multiple dealers
providing liquidity to investors is that the dealers must compete with one another,
thus lowering the cost of transacting.
Spread - 🧠 ANSWER ✔✔The difference between the bid price and the ask price.
If the price of a particular stock begins to heavily fluctuate, then the specialist will
INCREASE the spread.
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
4
STATEMENT. ALL RIGHTS RESERVED
