WGU D076 FINANCE SKILLS FOR
MANAGERS EXAM PREPARATION TEST
BANK WITH CORRECT ANSWERS
●● accounting
Answer: backward-looking
recording, reporting, and summarizing past financial information and
systems
●● managing working capital
Answer: day to day cash management
●● money market
Answer: a type of financial market used for short-term assets that are
held for less than one year
●● secondary market
Answer: the financial market where securities are traded after the initial
issuance
●● efficient market
Answer: a market in which prices fully reflect all the available
information about a specific security
,●● primary market
Answer: the market in which new securities are originally sold to
investors
●● coincident indicator
Answer: change at the same time as a change in the economy
●● leading indicator
Answer: change before the economy changes
●● lagging indicator
Answer: change after the economy changes and include unemployment
and CPI
●● mutual fund
Answer: fund that pools the savings of many individuals and invests this
money in a variety of stocks, bonds, and other financial assets
●● compounding interest
Answer: the interest on the principal plus the interest on earned interest
●● hurdle rate
, Answer: required rate of return... the minimum rate that a firm must
surpass to accept a project
●● standard deviation
Answer: a measure of dispersion of possible outcomes about the mean
●● 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
●● risk avoidance
Answer: a way to manage risk by not performing an activity that may
carry risk
●● risk separation
Answer: risk management technique that involves dispersing assets
geographically instead of concentrating them in one location
●● risk diversification
Answer: The process by which risks are shared across many different
assets or people, reducing the impact of any particular risk or any one
individual
●● risk retention
MANAGERS EXAM PREPARATION TEST
BANK WITH CORRECT ANSWERS
●● accounting
Answer: backward-looking
recording, reporting, and summarizing past financial information and
systems
●● managing working capital
Answer: day to day cash management
●● money market
Answer: a type of financial market used for short-term assets that are
held for less than one year
●● secondary market
Answer: the financial market where securities are traded after the initial
issuance
●● efficient market
Answer: a market in which prices fully reflect all the available
information about a specific security
,●● primary market
Answer: the market in which new securities are originally sold to
investors
●● coincident indicator
Answer: change at the same time as a change in the economy
●● leading indicator
Answer: change before the economy changes
●● lagging indicator
Answer: change after the economy changes and include unemployment
and CPI
●● mutual fund
Answer: fund that pools the savings of many individuals and invests this
money in a variety of stocks, bonds, and other financial assets
●● compounding interest
Answer: the interest on the principal plus the interest on earned interest
●● hurdle rate
, Answer: required rate of return... the minimum rate that a firm must
surpass to accept a project
●● standard deviation
Answer: a measure of dispersion of possible outcomes about the mean
●● 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
●● risk avoidance
Answer: a way to manage risk by not performing an activity that may
carry risk
●● risk separation
Answer: risk management technique that involves dispersing assets
geographically instead of concentrating them in one location
●● risk diversification
Answer: The process by which risks are shared across many different
assets or people, reducing the impact of any particular risk or any one
individual
●● risk retention
