D076 Finance Skills for Managers - Pre Assessment Questions With Correct Answers

In which way is accounting different from finance? - ANSWER-Accounting is backward looking, while finance is focused on the future. What is the main question that both individuals and companies must consider when making financial decisions to reach a goal? - ANSWER-Will the benefits of the action outweigh the cost? 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. - ANSWER-Making Financing Decision How can investing help a person reach personal financial goals? - 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? - ANSWER-Primary Market Which type of economic indicator changes after the economy changes and helps identify trends in the long term? - ANSWER-Lagging Indicator How does an investment institution, such as a mutual fund, facilitate the circulation of money in the economy? - ANSWER-By providing individuals and firms access to financial markets to buy or sell financial securities. Which type of economic indicator is used by governments and policymakers to implement or alter policies in an effort to avoid or minimize the effects of an economic downturn? - ANSWER-Leading Indicator