WGU D076 FINANCIAL SKILLS FOR
MANAGERS, D076 PRE-ASSESSMENT
EXAM ALL QUESTIONS AND CORRECT
DETAILED ANSWERS TOP RATED
VERSION FOR |ALREADY A GRADED
|NEW AND REVISED
Who is the highest ranking officer in corporate finance? - ANSWERSCFO, Chief
Financial Officer
What does the CFO do? - ANSWERSThe CFO is responsible for all the financial
decisions made by the firm. He or she serves as the CEO's right-hand person in all
money matters and oversees the financial analysis and decision-making of the firm.
Which task does a financial manager perform when assessing the costs and benefits
of potential projects? - ANSWERSMaking investment decisions
Which financial career focuses on investing capital into firms whose shares are not
currently sold on any public stock exchange? - ANSWERSPrivate equity
Which task does a financial manager perform when choosing to obtain a loan to
purchase a piece of equipment for a new project? - ANSWERSMaking financing
decisions
What are the three most important types of securities? - ANSWERSTreasury,
Corporate, and Stocks
Why does the SEC oversee Financial Markets? - ANSWERSTo protect Investors
What are the purposes of financial markets? - ANSWERSTo provide liquidity and
determine prices
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? -
ANSWERSBusiness finance
What is the primary difference between finance and accounting? -
ANSWERSFinance focuses on the future, while accounting is generally backward-
looking.
,Which subspecialty of finance primarily involves deciding which assets will create
more wealth and earn positive returns? - ANSWERSInvestments
An area of finance that deals with investment allocation and asset pricing. -
ANSWERSInvestments
An area of finance that involves organizations that accept deposits, offer investment
products, loan money, or broker financial transactions. - ANSWERSFinancial
Institutions
An area of finance that involves activities used to increase shareholder wealth. -
ANSWERSCorporate Finance.
What is the primary aim of personal finance goals? - ANSWERSTo maximize
satisfaction from products purchased and services obtained
What should be the main question a firm asks when considering any investment
decision? - ANSWERSDo the benefits of this investment outweigh the costs?
What is the primary goal of the financial manager of a firm? - ANSWERSTo
maximize owner wealth
What are three main tasks that a financial manager of a firm does in order to achieve
the goal of the firm, which is to maximize shareholder wealth? - ANSWERSmaking
investment decisions,
making financing decisions, and
managing working capital.
In which financial market are securities such as stocks and bonds are traded after
their initial issuance? - ANSWERSSecondary market
What kind of market primarily allows institutions to borrow and lend in the short
term? - ANSWERSMoney market
A local start-up company just hit its five-year anniversary and is planning an initial
public offering sometime this year. In order to issue public stock, which market will
the company use? - ANSWERSPrimary market
What is a depository institution? - ANSWERSAn institution that accepts and pays
interest on deposits of money, as well as extends loans
What is the primary role of financial institutions? - ANSWERSTo conduct financial
transactions such as investments, loans, and deposits
A large corporation is looking to merge with another large corporation. Which
financial institution can help them do this? - ANSWERSInvestment bank
Which type of financial institution deals mainly with providing for retirement through
employers? - ANSWERSPension fund
, The system of recording, reporting, and summarizing past financial information and
transactions. - ANSWERSAccounting
An activity ratio found by credit sales divided by accounts receivable. -
ANSWERSAccounts Receivable Turnover (AR Turnover)
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. -
ANSWERSActivity Ratios
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. - ANSWERSAdditional Funds Needed (AFN)
A bond covenant that describes things the company pledges itself to do in order to
protect bondholders.Go To - ANSWERSAffirmative Covenants
Costs that are incurred when management does not act in the best interest of
shareholders. - ANSWERSAgency Costs
When the agent (the management) does not act in the best interest of the principal
(the owners).Go To - ANSWERSAgency Problem
Companies or securities with beta greater than 1. - ANSWERSAggressive Assets
The annual interest rate that is charged for borrowing money or that is earned
through investment. - ANSWERSAnnual Percentage Rate
A stream of cash flows of an equal amount paid every consecutive period.Go To -
ANSWERSAnnuity
A series of equal payments made at the beginning of consecutive periods.Go To -
ANSWERSAnnuity Due
The process of valuing assets. - ANSWERSAsset Pricing
A secondary market with a physical location and where prices are determined by
investors' willingness to pay.Go To - ANSWERSAuction Market
An activity ratio found by the number of days in a year (365) divided by AR
turnover.Go To - ANSWERSAverage Collection Period (ACP)
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. -
ANSWERSBalance Sheet Forecasting
Receive deposits and extend loans to individuals and businesses. -
ANSWERSBanks and Credit Unions
MANAGERS, D076 PRE-ASSESSMENT
EXAM ALL QUESTIONS AND CORRECT
DETAILED ANSWERS TOP RATED
VERSION FOR |ALREADY A GRADED
|NEW AND REVISED
Who is the highest ranking officer in corporate finance? - ANSWERSCFO, Chief
Financial Officer
What does the CFO do? - ANSWERSThe CFO is responsible for all the financial
decisions made by the firm. He or she serves as the CEO's right-hand person in all
money matters and oversees the financial analysis and decision-making of the firm.
Which task does a financial manager perform when assessing the costs and benefits
of potential projects? - ANSWERSMaking investment decisions
Which financial career focuses on investing capital into firms whose shares are not
currently sold on any public stock exchange? - ANSWERSPrivate equity
Which task does a financial manager perform when choosing to obtain a loan to
purchase a piece of equipment for a new project? - ANSWERSMaking financing
decisions
What are the three most important types of securities? - ANSWERSTreasury,
Corporate, and Stocks
Why does the SEC oversee Financial Markets? - ANSWERSTo protect Investors
What are the purposes of financial markets? - ANSWERSTo provide liquidity and
determine prices
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? -
ANSWERSBusiness finance
What is the primary difference between finance and accounting? -
ANSWERSFinance focuses on the future, while accounting is generally backward-
looking.
,Which subspecialty of finance primarily involves deciding which assets will create
more wealth and earn positive returns? - ANSWERSInvestments
An area of finance that deals with investment allocation and asset pricing. -
ANSWERSInvestments
An area of finance that involves organizations that accept deposits, offer investment
products, loan money, or broker financial transactions. - ANSWERSFinancial
Institutions
An area of finance that involves activities used to increase shareholder wealth. -
ANSWERSCorporate Finance.
What is the primary aim of personal finance goals? - ANSWERSTo maximize
satisfaction from products purchased and services obtained
What should be the main question a firm asks when considering any investment
decision? - ANSWERSDo the benefits of this investment outweigh the costs?
What is the primary goal of the financial manager of a firm? - ANSWERSTo
maximize owner wealth
What are three main tasks that a financial manager of a firm does in order to achieve
the goal of the firm, which is to maximize shareholder wealth? - ANSWERSmaking
investment decisions,
making financing decisions, and
managing working capital.
In which financial market are securities such as stocks and bonds are traded after
their initial issuance? - ANSWERSSecondary market
What kind of market primarily allows institutions to borrow and lend in the short
term? - ANSWERSMoney market
A local start-up company just hit its five-year anniversary and is planning an initial
public offering sometime this year. In order to issue public stock, which market will
the company use? - ANSWERSPrimary market
What is a depository institution? - ANSWERSAn institution that accepts and pays
interest on deposits of money, as well as extends loans
What is the primary role of financial institutions? - ANSWERSTo conduct financial
transactions such as investments, loans, and deposits
A large corporation is looking to merge with another large corporation. Which
financial institution can help them do this? - ANSWERSInvestment bank
Which type of financial institution deals mainly with providing for retirement through
employers? - ANSWERSPension fund
, The system of recording, reporting, and summarizing past financial information and
transactions. - ANSWERSAccounting
An activity ratio found by credit sales divided by accounts receivable. -
ANSWERSAccounts Receivable Turnover (AR Turnover)
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. -
ANSWERSActivity Ratios
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. - ANSWERSAdditional Funds Needed (AFN)
A bond covenant that describes things the company pledges itself to do in order to
protect bondholders.Go To - ANSWERSAffirmative Covenants
Costs that are incurred when management does not act in the best interest of
shareholders. - ANSWERSAgency Costs
When the agent (the management) does not act in the best interest of the principal
(the owners).Go To - ANSWERSAgency Problem
Companies or securities with beta greater than 1. - ANSWERSAggressive Assets
The annual interest rate that is charged for borrowing money or that is earned
through investment. - ANSWERSAnnual Percentage Rate
A stream of cash flows of an equal amount paid every consecutive period.Go To -
ANSWERSAnnuity
A series of equal payments made at the beginning of consecutive periods.Go To -
ANSWERSAnnuity Due
The process of valuing assets. - ANSWERSAsset Pricing
A secondary market with a physical location and where prices are determined by
investors' willingness to pay.Go To - ANSWERSAuction Market
An activity ratio found by the number of days in a year (365) divided by AR
turnover.Go To - ANSWERSAverage Collection Period (ACP)
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. -
ANSWERSBalance Sheet Forecasting
Receive deposits and extend loans to individuals and businesses. -
ANSWERSBanks and Credit Unions
