WGU C214 FINANCIAL MANAGEMENT PASS THE OA
EXAM| QUESTIONS AND ANSWERS| UPDATE|A
GRADED
Statement of Cash Flows - (ANSWER)Shows the change in cash balance for a
period of time. Focuses only on items where cash is received, or cash is paid.
Cash Flow from Operating Activities (CFO) - (ANSWER)Cash flow that a company
generates as a result of day-to-day business operations. Deals with Current Assets
and Current Liabilities.
Cash Flow from Investing Activities (CFI) - (ANSWER)Cash flow that is generated
from investments in long term assets.
Cash Flow from Financing Activities (CFF) - (ANSWER)Cash flow that is used to
fund the company. Cash flow that is generated from financing the business.
Includes Debt & Equity.
How does an increase in Accounts receivable impact CFO? - (ANSWER)An
Increase in Accounts receivable will decrease CFO
How does an increase in Accounts payable impact CFO? - (ANSWER)An Increase
in Accounts Payable will increase CFO
What financial statement is prepared at a point in time - (ANSWER)Balance Sheet
, What financial statements are prepared for a period of time? - (ANSWER)·
Income Statement
· Retained Earnings Statement
· Statement of Cash Flows
Define Efficient Frontier - (ANSWER)Maximizes expected return for a given level
of risk
Where would a risk averse investor fall on the efficient frontier? -
(ANSWER)100% Bonds
Where would a risk-taking investor fall on the efficient frontier? - (ANSWER)100%
Stocks
What is a Beta? - (ANSWER)A Measure of Risk - A Beta 1 is the average risk of all
stocks. Anytime a beta is below 1, it is less risk. If it is more than 1, it is high risk.
Define efficient market hypothesis as it relates to a firm? - (ANSWER)For any
company to survive, they need to make profitable decisions. Otherwise, investors
will shun their business. The firm needs to invest where the return is more than
the cost.
EXAM| QUESTIONS AND ANSWERS| UPDATE|A
GRADED
Statement of Cash Flows - (ANSWER)Shows the change in cash balance for a
period of time. Focuses only on items where cash is received, or cash is paid.
Cash Flow from Operating Activities (CFO) - (ANSWER)Cash flow that a company
generates as a result of day-to-day business operations. Deals with Current Assets
and Current Liabilities.
Cash Flow from Investing Activities (CFI) - (ANSWER)Cash flow that is generated
from investments in long term assets.
Cash Flow from Financing Activities (CFF) - (ANSWER)Cash flow that is used to
fund the company. Cash flow that is generated from financing the business.
Includes Debt & Equity.
How does an increase in Accounts receivable impact CFO? - (ANSWER)An
Increase in Accounts receivable will decrease CFO
How does an increase in Accounts payable impact CFO? - (ANSWER)An Increase
in Accounts Payable will increase CFO
What financial statement is prepared at a point in time - (ANSWER)Balance Sheet
, What financial statements are prepared for a period of time? - (ANSWER)·
Income Statement
· Retained Earnings Statement
· Statement of Cash Flows
Define Efficient Frontier - (ANSWER)Maximizes expected return for a given level
of risk
Where would a risk averse investor fall on the efficient frontier? -
(ANSWER)100% Bonds
Where would a risk-taking investor fall on the efficient frontier? - (ANSWER)100%
Stocks
What is a Beta? - (ANSWER)A Measure of Risk - A Beta 1 is the average risk of all
stocks. Anytime a beta is below 1, it is less risk. If it is more than 1, it is high risk.
Define efficient market hypothesis as it relates to a firm? - (ANSWER)For any
company to survive, they need to make profitable decisions. Otherwise, investors
will shun their business. The firm needs to invest where the return is more than
the cost.
