WGU D076 OBJECTIVE ASSESSMENT FINAL (VERSION A
AND B) 200 Questions And Correct Detailed Answers
Comprehensive Resource To Help You Ace 2026-2027
Includes Frequently Tested Questions With ELABORATED
100% Correct COMPLETE SOLUTIONS
Guaranteed Pass First Attempt!!
Current Update!!
1. Which type of financial institution is a mutual fund? - Correct Answer:
Investment institution - Investment institutions provide individuals and
firms access to financial markets.
2. Which financial institution specializes in managing and administering
retirement funds? - Correct Answer: Pension funds -Pension funds
specialize in retirement funds.
3. Which type of economic indicator is the consumer price index? - Correct
Answer: Lagging indicator - CPI usually changes after the economy as a
whole changes.
4. What does the term ethical refer to? - Correct Answer: The accepted
standards of conduct that guide a person's behavior -Ethical refers to the
accepted standards of conduct that guide a person's behavior.
5. 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? - Correct Answer: Agency problem due to conflicting interests
- Accounting manipulation by management in pursuit of higher stock-
related compensation is an example of an agency problem.
6. What is the name for the interest rate expressed on an annual basis? -
Correct Answer: Annual percentage rate - The APR is the annual interest
rate that is charged for borrowing money or that is earned through
investment, and it is calculated on an annual basis.
7. Why is the required rate of return also known as the hurdle rate? -
Correct Answer: It is the minimum rate that a firm must surpass to accept a
project. - When a financial manager decides whether to invest in a certain
project, the projected return needs to meet the minimum rate of return, or
else the firm must "hurdle" the rate in order to accept the project.
8. What is the inflation rate? - Correct Answer: The rate at which the
average price level of a basket of goods and services in an economy
increases - The rate at which the average price level of a basket of goods
and services in an economy increases is the inflation rate.
9. What does the risk-free rate indicate? - Correct Answer: Inflation and
opportunity cost - The risk-free rate includes inflation and opportunity cost.
10.Suppose Sophia is considering a new stock investment for her retirement
account. This stock has significant risk, but is quite popular in the market.
Inflation for the next few years is expected to be 2-3% per year, and the
current U.S. Treasury rates are about 2%. How should she use this
, information to decide what type of return she can expect from the stock? -
Correct Answer: Based on the inflation rate, she should expect this
stock to provide a return higher than this for the associated risk. - Since the
inflation of 2-3% will reduce any nominal returns she receives by this
amount, she would want a higher return to accommodate for the
opportunity costs and risks associated with the investment.
11.Twenty years ago, Mateo started an investment account with $2,000. He
then invested $100 into the account every month at the end of each month.
Today, he has $46,528 in the same account. What is the term for the $100
monthly cash flows? - Correct Answer: Annuity - The fixed amount of
$100 given every month is an annuity.
12.Lolo invested $30,000 today in an account that gives 3% interest. Starting
one year from today, she will be able to pull out little over $3,500 a year.
What does the $30,000 represent? - Correct Answer: Present value -
The $30,000 is invested before any cash flows, so it is a relative past cash
flow. Therefore, this is the present value.
13.What makes the expected return subjective and different from other types
of returns? - Correct Answer: The expected return is based on
expectational data and the probability of different scenarios occurring. - The
expected return is calculated from hypothesized or "best-guess" estimates
of future prices or returns in different scenarios.
14.A company that produces soap, shampoo, lotion, and other personal care
products has recently taken a hit due to a competitor's new product line.
The company decides to reduce wages for its labor force to save money
while the company focuses on building up its reputation again, but the
, company's labor force goes on strike to protest the pay cuts. What type of
risk does the strike represent? - Correct Answer: Idiosyncratic risk -
Idiosyncratic risk is the same as firm-specific risk. Since the strike will most
likely affect only this firm, it is a firm-specific risk.
15.Which description below correctly identifies one type of price risk? -
Correct Answer: Operating risk—depends on the effect of the firm's
operating decisions on its operating costs -
16.What is the name for the process of "spreading" money over many different
assets? - Correct Answer: Diversification
17.What is default risk? - Correct Answer: A firm-specific risk that comes
from the probability of a loss resulting from a borrower's failure to repay a
contractual obligation -
18.Which type of interest rate includes interest on interest in addition to
interest on the principal? - Correct Answer: Compound interest - The
compound interest is known as interests on interests and the principal
instead of only on the principal.
19.What is the rate at which the average price level of particular goods and
services in an economy increases over a period of time? - Correct
Answer: Inflation rate
20.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
AND B) 200 Questions And Correct Detailed Answers
Comprehensive Resource To Help You Ace 2026-2027
Includes Frequently Tested Questions With ELABORATED
100% Correct COMPLETE SOLUTIONS
Guaranteed Pass First Attempt!!
Current Update!!
1. Which type of financial institution is a mutual fund? - Correct Answer:
Investment institution - Investment institutions provide individuals and
firms access to financial markets.
2. Which financial institution specializes in managing and administering
retirement funds? - Correct Answer: Pension funds -Pension funds
specialize in retirement funds.
3. Which type of economic indicator is the consumer price index? - Correct
Answer: Lagging indicator - CPI usually changes after the economy as a
whole changes.
4. What does the term ethical refer to? - Correct Answer: The accepted
standards of conduct that guide a person's behavior -Ethical refers to the
accepted standards of conduct that guide a person's behavior.
5. 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? - Correct Answer: Agency problem due to conflicting interests
- Accounting manipulation by management in pursuit of higher stock-
related compensation is an example of an agency problem.
6. What is the name for the interest rate expressed on an annual basis? -
Correct Answer: Annual percentage rate - The APR is the annual interest
rate that is charged for borrowing money or that is earned through
investment, and it is calculated on an annual basis.
7. Why is the required rate of return also known as the hurdle rate? -
Correct Answer: It is the minimum rate that a firm must surpass to accept a
project. - When a financial manager decides whether to invest in a certain
project, the projected return needs to meet the minimum rate of return, or
else the firm must "hurdle" the rate in order to accept the project.
8. What is the inflation rate? - Correct Answer: The rate at which the
average price level of a basket of goods and services in an economy
increases - The rate at which the average price level of a basket of goods
and services in an economy increases is the inflation rate.
9. What does the risk-free rate indicate? - Correct Answer: Inflation and
opportunity cost - The risk-free rate includes inflation and opportunity cost.
10.Suppose Sophia is considering a new stock investment for her retirement
account. This stock has significant risk, but is quite popular in the market.
Inflation for the next few years is expected to be 2-3% per year, and the
current U.S. Treasury rates are about 2%. How should she use this
, information to decide what type of return she can expect from the stock? -
Correct Answer: Based on the inflation rate, she should expect this
stock to provide a return higher than this for the associated risk. - Since the
inflation of 2-3% will reduce any nominal returns she receives by this
amount, she would want a higher return to accommodate for the
opportunity costs and risks associated with the investment.
11.Twenty years ago, Mateo started an investment account with $2,000. He
then invested $100 into the account every month at the end of each month.
Today, he has $46,528 in the same account. What is the term for the $100
monthly cash flows? - Correct Answer: Annuity - The fixed amount of
$100 given every month is an annuity.
12.Lolo invested $30,000 today in an account that gives 3% interest. Starting
one year from today, she will be able to pull out little over $3,500 a year.
What does the $30,000 represent? - Correct Answer: Present value -
The $30,000 is invested before any cash flows, so it is a relative past cash
flow. Therefore, this is the present value.
13.What makes the expected return subjective and different from other types
of returns? - Correct Answer: The expected return is based on
expectational data and the probability of different scenarios occurring. - The
expected return is calculated from hypothesized or "best-guess" estimates
of future prices or returns in different scenarios.
14.A company that produces soap, shampoo, lotion, and other personal care
products has recently taken a hit due to a competitor's new product line.
The company decides to reduce wages for its labor force to save money
while the company focuses on building up its reputation again, but the
, company's labor force goes on strike to protest the pay cuts. What type of
risk does the strike represent? - Correct Answer: Idiosyncratic risk -
Idiosyncratic risk is the same as firm-specific risk. Since the strike will most
likely affect only this firm, it is a firm-specific risk.
15.Which description below correctly identifies one type of price risk? -
Correct Answer: Operating risk—depends on the effect of the firm's
operating decisions on its operating costs -
16.What is the name for the process of "spreading" money over many different
assets? - Correct Answer: Diversification
17.What is default risk? - Correct Answer: A firm-specific risk that comes
from the probability of a loss resulting from a borrower's failure to repay a
contractual obligation -
18.Which type of interest rate includes interest on interest in addition to
interest on the principal? - Correct Answer: Compound interest - The
compound interest is known as interests on interests and the principal
instead of only on the principal.
19.What is the rate at which the average price level of particular goods and
services in an economy increases over a period of time? - Correct
Answer: Inflation rate
20.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
