D076 PA EXAM QUESTIONS WITH
COMPLETE SOLUTIONS
In which way is accounting different from finance?
| | | | | | |
Accounting forecasts future performance, given the past, while finance
| | | | | | | | |
records past performance.
| |
Accounting is backward looking, while finance is focused on the future.
| | | | | | | | | |
Accounting is focused on allocating capital, while finance is focused on
| | | | | | | | | | |
bringing in capital. | |
Accounting is about budgeting, saving, and borrowing, while finance is
| | | | | | | | | |
about investing, forecasting, and lending. - CORRECT ANSWER✔✔-
| | | | | | |
Accounting forecasts future performance, given the past, while finance
| | | | | | | | |
records past performance.
| |
What is the main question that both individuals and companies must
| | | | | | | | | | |
consider when making financial decisions to reach a goal?
| | | | | | | |
Will this decision require debt or equity financing?
| | | | | | |
Will this decrease the amount of cash available?
| | | | | | |
Will the benefits of the action outweigh the costs?
| | | | | | | |
Will utility be maximized through this decision? - CORRECT
| | | | | | | | |
ANSWER✔✔-Will the benefits of the action outweigh the costs? | | | | | | | |
,A financial manager at a company is trying to determine whether to
| | | | | | | | | | | |
issue new stocks or new bonds to cover the costs of a project the
| | | | | | | | | | | | | |
company is doing the next year. | | | | |
Which main task in business finance is this situation an example of?
| | | | | | | | | | |
Making financing decisions
| |
Managing working capital | |
Making investment decisions
| |
Managing interdepartmental loans - CORRECT ANSWER✔✔-Making
| | | | | |
financing decisions |
How can investing help a person reach personal financial goals?
| | | | | | | | |
It ensures money is placed in a safe, risk-free, and easily accessible
| | | | | | | | | | | |
financial asset. |
It helps a person understand how money was spent previously in order
| | | | | | | | | | | |
to reliably predict future expenses.
| | | |
It provides access to potential revenue or increases in value to help
| | | | | | | | | | | |
meet goals faster.
| |
It provides a guaranteed future outcome in order to predictably meet
| | | | | | | | | | |
financial goals. - CORRECT ANSWER✔✔-It provides access to potential
| | | | | | | | |
revenue or increases in value to help meet goals faster.
| | | | | | | | |
A sign company is planning to have an initial public offering (IPO). In
| | | | | | | | | | | | |
which type of market will its stock first be sold to the public?
| | | | | | | | | | | |
Primary market |
, Efficient market |
Money market |
Secondary market - CORRECT ANSWER✔✔-Primary market
| | | | |
Which type of economic indicator changes after the economy changes
| | | | | | | | | |
and helps identify trends in the long term?
| | | | | | |
Coincident indicator |
Leading indicator |
Lagging indicator |
Yield curve indicator - CORRECT ANSWER✔✔-Lagging indicator
| | | | | |
How does an investment institution, such as a mutual fund, facilitate the
| | | | | | | | | | |
circulation of money in the economy?
| | | | | |
By providing individuals and firms access to financial markets to buy or
| | | | | | | | | | | |
sell financial securities
| |
By raising capital on a contractual basis, such as an insurance contract
| | | | | | | | | | |
By accepting deposits of money, paying interest on deposits, and
| | | | | | | | | |
providing loans to individuals and organizations
| | | | |
By insuring deposits in investment accounts up to $250,000 to promote
| | | | | | | | | | |
public confidence - CORRECT ANSWER✔✔-By providing individuals and
| | | | | | | |
firms access to financial markets to buy or sell financial securities
| | | | | | | | | |
COMPLETE SOLUTIONS
In which way is accounting different from finance?
| | | | | | |
Accounting forecasts future performance, given the past, while finance
| | | | | | | | |
records past performance.
| |
Accounting is backward looking, while finance is focused on the future.
| | | | | | | | | |
Accounting is focused on allocating capital, while finance is focused on
| | | | | | | | | | |
bringing in capital. | |
Accounting is about budgeting, saving, and borrowing, while finance is
| | | | | | | | | |
about investing, forecasting, and lending. - CORRECT ANSWER✔✔-
| | | | | | |
Accounting forecasts future performance, given the past, while finance
| | | | | | | | |
records past performance.
| |
What is the main question that both individuals and companies must
| | | | | | | | | | |
consider when making financial decisions to reach a goal?
| | | | | | | |
Will this decision require debt or equity financing?
| | | | | | |
Will this decrease the amount of cash available?
| | | | | | |
Will the benefits of the action outweigh the costs?
| | | | | | | |
Will utility be maximized through this decision? - CORRECT
| | | | | | | | |
ANSWER✔✔-Will the benefits of the action outweigh the costs? | | | | | | | |
,A financial manager at a company is trying to determine whether to
| | | | | | | | | | | |
issue new stocks or new bonds to cover the costs of a project the
| | | | | | | | | | | | | |
company is doing the next year. | | | | |
Which main task in business finance is this situation an example of?
| | | | | | | | | | |
Making financing decisions
| |
Managing working capital | |
Making investment decisions
| |
Managing interdepartmental loans - CORRECT ANSWER✔✔-Making
| | | | | |
financing decisions |
How can investing help a person reach personal financial goals?
| | | | | | | | |
It ensures money is placed in a safe, risk-free, and easily accessible
| | | | | | | | | | | |
financial asset. |
It helps a person understand how money was spent previously in order
| | | | | | | | | | | |
to reliably predict future expenses.
| | | |
It provides access to potential revenue or increases in value to help
| | | | | | | | | | | |
meet goals faster.
| |
It provides a guaranteed future outcome in order to predictably meet
| | | | | | | | | | |
financial goals. - CORRECT ANSWER✔✔-It provides access to potential
| | | | | | | | |
revenue or increases in value to help meet goals faster.
| | | | | | | | |
A sign company is planning to have an initial public offering (IPO). In
| | | | | | | | | | | | |
which type of market will its stock first be sold to the public?
| | | | | | | | | | | |
Primary market |
, Efficient market |
Money market |
Secondary market - CORRECT ANSWER✔✔-Primary market
| | | | |
Which type of economic indicator changes after the economy changes
| | | | | | | | | |
and helps identify trends in the long term?
| | | | | | |
Coincident indicator |
Leading indicator |
Lagging indicator |
Yield curve indicator - CORRECT ANSWER✔✔-Lagging indicator
| | | | | |
How does an investment institution, such as a mutual fund, facilitate the
| | | | | | | | | | |
circulation of money in the economy?
| | | | | |
By providing individuals and firms access to financial markets to buy or
| | | | | | | | | | | |
sell financial securities
| |
By raising capital on a contractual basis, such as an insurance contract
| | | | | | | | | | |
By accepting deposits of money, paying interest on deposits, and
| | | | | | | | | |
providing loans to individuals and organizations
| | | | |
By insuring deposits in investment accounts up to $250,000 to promote
| | | | | | | | | | |
public confidence - CORRECT ANSWER✔✔-By providing individuals and
| | | | | | | |
firms access to financial markets to buy or sell financial securities
| | | | | | | | | |
