C214 WGU FINANCIAL MANAGEMENT END OF SECTION QUESTIONS WITH 100% CORRECT ANSWERS

Economics is a subfield of Finance (t/f) 1.1 CORRECT ANSWER F. Finance is a subfield of Economics. (right answer) Which of the following is not an example of firm capital? 1.1 CORRECT ANSWER Financial markets Which of the following are examples of firm capital? 1.1 CORRECT ANSWER Cash, Labor, Machinery Capital is defined as a financial asset. (t/f) 1.1 CORRECT ANSWER T. Capital is defined as a financial asset. Corporate finance is devoted to understanding various types of financial instruments. (t/f) 1.1 CORRECT ANSWER F. Investments is devoted to understanding various types of financial instruments. (right answer) Which of the following is an example of firm capital? 1.1 CORRECT ANSWER Cash Corporate finance focuses on the decision making by the management of the firm. (t/f) 1.1 CORRECT ANSWER T. Corporate finance focuses on the decision making by the management of the firm. What are the three important areas of finance discussed in this section?1.1 CORRECT ANSWER Corporate Finance, Investments, and Banking/financial institutions Banks make money when interest rates they charge to borrowers are less than interest rates they pay depositors. (t/f) 1.1 CORRECT ANSWER F. Banks make money when interest rates they charge to borrowers are MORE than interest rates they pay depositors. (right answer) Stocks and bonds are two types of financial instruments. t/f 1.1 CORRECT ANSWER T. Stocks and bonds are two types of financial instruments. Stock represents ownership in a particular company. t/f 1.2 CORRECT ANSWER T. Stock represents ownership in a particular company. Companies can raise capital by issuing bonds or stocks. t/f 1.2 CORRECT ANSWER T. Companies can raise capital by issuing bonds or stocks. A stock is a debt instrument issued by corporations. t/f 1.2 CORRECT ANSWER F. A stock represents ownership in a company (right answer)