WGU D076 Task 1 – Comprehensive Emergency
Response Practice Exam (50 Questions with Answers &
Rationales)
Business finance - answer-;Which area of finance deals with sources of funding and the capital
structure of corporations and seeks to increase the value of a firm to its owners?
Private Equity - answer-;A financial institution that invests in an entity that is not publicly listed
or traded using money received from institutional investors and wealthy individuals.Go To
Privately Held Companies - answer-;Firms that have not issued shares to the public where the
ownership rights are privately held.Go To
Pro Forma Statements - answer-;A financial statement that projects an estimate for future
periods "as if" sales grew as predicted.Go To
Profit Forecasting - answer-;The projection of future earnings after all projected costs are
subtracted from projected sales.Go To
Profitability Index (PI) - answer-;The ratio of payoff to investment for a proposed project.Go To
Profitability Ratios - answer-;A category of ratios that are commonly used to directly judge how
well management is doing as they strive to maximize owner wealth.Go To
Publicly Traded Firms - answer-;Firms that have issued shares to the public.Go To
,Quick Ratio - answer-;A liquidity ratios found by current assets less inventory, divided by current
liabilities; also called the acid-test ratio.Go To
Real Rate - answer-;An interest rate that is adjusted to remove the effects of inflation.Go To
Required Rate of Return - answer-;The minimum return or compensation an investor requires in
order to invest; see interest rate.Go To
Research and Development - answer-;The business function responsible for improving and
developing services and products.Go To
Retention Ratio - answer-;The percent of net income retained in the firm; also called the
plowback ratio.Go To
Return - answer-;The money gained or lost on an investment over a certain period of time.Go
To
Return On Assets (ROA) - answer-;A profitability ratio found by net income divided by total
assets.Go To
Return On Equity (ROE) - answer-;A profitability ratio found by net income divided by owners'
equity.Go To
Revenues - answer-;The top line of the income statement. The total amount of money a
business brings in (before subtracting any costs).Go To
Risk - answer-;The possibility that the realized or actual return will differ from the expected
return.Go To
,Risk Avoidance - answer-;A way to manage risk by not performing an activity that may carry
risk.Go To
Risk Premium - answer-;The compensation for the amount of risk taken on by investors.Go To
Risk Reduction - answer-;A series of techniques that help reduce the amount of risk a person is
exposed to by taking a particular action.Go To
Risk Retention - answer-;A decision to take responsibility for a particular risk.Go To
Risk Separation - answer-;A risk management technique that involves dispersing assets
geographically instead of concentrating them in one location.Go To
Risk Transfer - answer-;A risk management technique that involves reducing the amount of risk
you are exposed to by transferring that risk to another entity.Go To
Risk-free Rate - answer-;The rate of return on an investment with no risk.Go To
Sales - answer-;The top line of the income statement. The total amount of money a business
brings in (before subtracting out any costs).Go To
Seasonal Firms - answer-;Firms whose performance varies according to the season.Go To
Secondary Market - answer-;The financial market where securities are traded after the initial
issuance.Go To
, Securitization - answer-;The process of combining several types of contractual debt (such as
mortgages) and reselling them as a package to investors.Go To
Shareholders - answer-;A person who owns shares of a company's stock.Go To
Simple Interest - answer-;The interest earned only on the principal.Go To
Specialist - answer-;A market maker on the NYSE that holds an inventory of securities and acts
as a liquidity provider to those that wish to buy and sell.Go To
Spontaneous Accounts - answer-;Accounts that vary naturally with sales.Go To
Stakeholder - answer-;Anyone who may be affected by actions taken or a decision made.Go To
Standard Deviation - answer-;A measure of dispersion of possible outcomes about the mean.Go
To
Steady State Growth - answer-;The level of growth where four key financial ratios—profitability,
asset utilization, leverage, and payout—are constant and where the firm does not need to issue
any new equity to fund the growth.Go To
Risk-free rate - answer-;Which component of an interest rate is an indicator of inflation and
opportunity cost?
Nominal rate - answer-;Which type of interest rate is the rate at which invested money grows
for a certain period time?
Risk premium - answer-;What is the compensation for risk given to investors called?
Response Practice Exam (50 Questions with Answers &
Rationales)
Business finance - answer-;Which area of finance deals with sources of funding and the capital
structure of corporations and seeks to increase the value of a firm to its owners?
Private Equity - answer-;A financial institution that invests in an entity that is not publicly listed
or traded using money received from institutional investors and wealthy individuals.Go To
Privately Held Companies - answer-;Firms that have not issued shares to the public where the
ownership rights are privately held.Go To
Pro Forma Statements - answer-;A financial statement that projects an estimate for future
periods "as if" sales grew as predicted.Go To
Profit Forecasting - answer-;The projection of future earnings after all projected costs are
subtracted from projected sales.Go To
Profitability Index (PI) - answer-;The ratio of payoff to investment for a proposed project.Go To
Profitability Ratios - answer-;A category of ratios that are commonly used to directly judge how
well management is doing as they strive to maximize owner wealth.Go To
Publicly Traded Firms - answer-;Firms that have issued shares to the public.Go To
,Quick Ratio - answer-;A liquidity ratios found by current assets less inventory, divided by current
liabilities; also called the acid-test ratio.Go To
Real Rate - answer-;An interest rate that is adjusted to remove the effects of inflation.Go To
Required Rate of Return - answer-;The minimum return or compensation an investor requires in
order to invest; see interest rate.Go To
Research and Development - answer-;The business function responsible for improving and
developing services and products.Go To
Retention Ratio - answer-;The percent of net income retained in the firm; also called the
plowback ratio.Go To
Return - answer-;The money gained or lost on an investment over a certain period of time.Go
To
Return On Assets (ROA) - answer-;A profitability ratio found by net income divided by total
assets.Go To
Return On Equity (ROE) - answer-;A profitability ratio found by net income divided by owners'
equity.Go To
Revenues - answer-;The top line of the income statement. The total amount of money a
business brings in (before subtracting any costs).Go To
Risk - answer-;The possibility that the realized or actual return will differ from the expected
return.Go To
,Risk Avoidance - answer-;A way to manage risk by not performing an activity that may carry
risk.Go To
Risk Premium - answer-;The compensation for the amount of risk taken on by investors.Go To
Risk Reduction - answer-;A series of techniques that help reduce the amount of risk a person is
exposed to by taking a particular action.Go To
Risk Retention - answer-;A decision to take responsibility for a particular risk.Go To
Risk Separation - answer-;A risk management technique that involves dispersing assets
geographically instead of concentrating them in one location.Go To
Risk Transfer - answer-;A risk management technique that involves reducing the amount of risk
you are exposed to by transferring that risk to another entity.Go To
Risk-free Rate - answer-;The rate of return on an investment with no risk.Go To
Sales - answer-;The top line of the income statement. The total amount of money a business
brings in (before subtracting out any costs).Go To
Seasonal Firms - answer-;Firms whose performance varies according to the season.Go To
Secondary Market - answer-;The financial market where securities are traded after the initial
issuance.Go To
, Securitization - answer-;The process of combining several types of contractual debt (such as
mortgages) and reselling them as a package to investors.Go To
Shareholders - answer-;A person who owns shares of a company's stock.Go To
Simple Interest - answer-;The interest earned only on the principal.Go To
Specialist - answer-;A market maker on the NYSE that holds an inventory of securities and acts
as a liquidity provider to those that wish to buy and sell.Go To
Spontaneous Accounts - answer-;Accounts that vary naturally with sales.Go To
Stakeholder - answer-;Anyone who may be affected by actions taken or a decision made.Go To
Standard Deviation - answer-;A measure of dispersion of possible outcomes about the mean.Go
To
Steady State Growth - answer-;The level of growth where four key financial ratios—profitability,
asset utilization, leverage, and payout—are constant and where the firm does not need to issue
any new equity to fund the growth.Go To
Risk-free rate - answer-;Which component of an interest rate is an indicator of inflation and
opportunity cost?
Nominal rate - answer-;Which type of interest rate is the rate at which invested money grows
for a certain period time?
Risk premium - answer-;What is the compensation for risk given to investors called?
