WGU C214 OBJECTIVE ASSESSMENT LATEST 2026
ACTUAL EXAM| C214 FINANCIAL MANAGEMENT OA
EXAM WITH COMPLETE QUESTIONS AND CORRECT
VERIFIED ANSWERS/ ALREADY GRADED A+
Question 1
What is the primary goal of financial management in a
corporation?
A. Maximize revenue
B. Maximize shareholder wealth
C. Minimize costs
D. Maximize employee satisfaction
Answer: B. Maximize shareholder wealth
Rationale: The primary goal of financial management is
maximizing shareholder wealth, which is reflected in the stock
price. While revenue maximization and cost minimization are
means to achieve this goal, they are not the ultimate objective.
1
,Shareholder wealth maximization considers both profitability
and risk, balancing short-term and long-term value creation .
Question 2
Which of the following is an example of a financial
instrument?
A. Inventory
B. Equipment
C. Stock
D. Accounts receivable
Answer: C. Stock
Rationale: Financial instruments are contracts that represent
financial value. Stocks represent equity ownership in a
corporation, while bonds represent debt. Inventory, equipment,
and accounts receivable are real assets, not financial
instruments .
2
,Question 3
A totally domestic firm would worry about international trade
because of:
A. Changes in domestic tax laws
B. Competition from foreign firm imports
C. Domestic interest rate changes
D. Changes in domestic labor laws
Answer: B. Competition from foreign firm imports
Rationale: Even firms that operate entirely within the U.S. face
competition from foreign imports. This competition can affect
market share, pricing power, and profitability. International
trade impacts domestic firms through foreign competition, even if
the firm does not export .
Question 4
What is the term for corporate managers acting in their own
interests rather than the stockholders' interests?
3
, A. Moral hazard
B. Agency cost
C. Adverse selection
D. Information asymmetry
Answer: B. Agency cost
Rationale: Agency costs arise when managers (agents) pursue
their own interests instead of maximizing shareholder value. This
conflict of interest between principals (shareholders) and agents
(managers) can lead to suboptimal decisions, reduced firm value,
and costs associated with monitoring and aligning management
incentives .
Question 5
What is the best way for a firm to avoid agency costs?
A. Increase manager salaries
B. Tie compensation to the stock price
4
ACTUAL EXAM| C214 FINANCIAL MANAGEMENT OA
EXAM WITH COMPLETE QUESTIONS AND CORRECT
VERIFIED ANSWERS/ ALREADY GRADED A+
Question 1
What is the primary goal of financial management in a
corporation?
A. Maximize revenue
B. Maximize shareholder wealth
C. Minimize costs
D. Maximize employee satisfaction
Answer: B. Maximize shareholder wealth
Rationale: The primary goal of financial management is
maximizing shareholder wealth, which is reflected in the stock
price. While revenue maximization and cost minimization are
means to achieve this goal, they are not the ultimate objective.
1
,Shareholder wealth maximization considers both profitability
and risk, balancing short-term and long-term value creation .
Question 2
Which of the following is an example of a financial
instrument?
A. Inventory
B. Equipment
C. Stock
D. Accounts receivable
Answer: C. Stock
Rationale: Financial instruments are contracts that represent
financial value. Stocks represent equity ownership in a
corporation, while bonds represent debt. Inventory, equipment,
and accounts receivable are real assets, not financial
instruments .
2
,Question 3
A totally domestic firm would worry about international trade
because of:
A. Changes in domestic tax laws
B. Competition from foreign firm imports
C. Domestic interest rate changes
D. Changes in domestic labor laws
Answer: B. Competition from foreign firm imports
Rationale: Even firms that operate entirely within the U.S. face
competition from foreign imports. This competition can affect
market share, pricing power, and profitability. International
trade impacts domestic firms through foreign competition, even if
the firm does not export .
Question 4
What is the term for corporate managers acting in their own
interests rather than the stockholders' interests?
3
, A. Moral hazard
B. Agency cost
C. Adverse selection
D. Information asymmetry
Answer: B. Agency cost
Rationale: Agency costs arise when managers (agents) pursue
their own interests instead of maximizing shareholder value. This
conflict of interest between principals (shareholders) and agents
(managers) can lead to suboptimal decisions, reduced firm value,
and costs associated with monitoring and aligning management
incentives .
Question 5
What is the best way for a firm to avoid agency costs?
A. Increase manager salaries
B. Tie compensation to the stock price
4
