WGU D076 - Study Set Complete With Solutions
Accounting vs. Finance Right Ans - Accounting:
Tracks what happened to firm's money in the past
Financial Management:
Combines historical figures and current information
Determines what should happen with firm's money now and in the future
three primary areas in the world of finance Right Ans - -Business
finance the financial management of a business enterprise. AKA-
managerial finance, financial management, and organizational finance.
-Investments the action or process of investing money for profit or material
result.
-Financial institutions businesses that provide banking services to
consumers and businesses
Utility Right Ans - Ability or capacity of a good or service to be useful
and give satisfaction to someone.
What should be the main question a firm asks when considering any
investment decision? Right Ans - Do the benefits of this investment
outweigh the costs?
three main tasks that a financial manager of a firm does in order to achieve
the goal of the firm Right Ans - -making investment decisions,
-making financing decisions, and
-managing working capital.
Corporate Finance Right Ans - the study of the relationship between
business decisions and the value of the stock in the business
highest-ranking officer in corporate finance is typically the chief financial
officer (CFO)
Investment Banking Right Ans - The primary tasks of an analyst are
preparing presentations, performing financial analyses of companies, and
doing administrative tasks. They spend a lot of time creating PowerPoint
presentations, called pitch books. Some of the tasks that investment banks
,perform are mergers and acquisitions, corporate offerings, and sales and
trading. Those who are promoted become senior bankers, such as vice
presidents and managing directors.
Private Equity (PE) Right Ans - a general term that includes angel
investors, venture capitalists, and takeover firms. It is termed "private"
equity because it deals with investments in firms that are privately held
and whose ownership is not yet bought or sold on any public stock
exchange. It is common for private equity firms to engage in buyouts or
what are called leveraged buyouts (LBOs). Similar to hedge funds, PE offers
the potential of very high compensation.
Commercial Banking Right Ans - a financial institution that accepts
deposits; offers checking and savings accounts and other basic financial
products; and extends various loans, such as auto loans and home
mortgages.
Financial Planning Right Ans - Professional financial planners work with
individuals to help them achieve their financial goals. Financial planners
often help clients create budgets and prepare for retirement. An important
role of financial planners is to help direct their clients' investments. It is
typical for financial planners to also help with tax planning, such as setting
up trusts, estates, and wills. Will likely require you to obtain the
professional designation of Certified Financial Planner (CFP).
Real Estate Right Ans - There are many common jobs in the field of
insurance: agent/broker, underwriter, loss adjuster, risk manager, claims
investigator, actuary, appraiser, and more.
Finance Is Right Ans - the management and allocation of capital or
money with the objective of investing, forecasting, budgeting, saving,
borrowing, and lending.
New bonds Right Ans - Debt
Bonds are the vehicles by which corporations raise debt capital. While
individuals go to a bank to borrow money, bonds are the primary means of
borrowing money in the corporate world. A firm that issues bonds is
borrowing money directly from investors on the market. When you buy a
,bond, you as an investor are loaning money to the firm that issued the
bond.
New stock Right Ans - equity
three most important Financial Securities Right Ans - -Treasury
securities
-Corporate bonds
-Stocks.
Treasury Securities Right Ans - are generally bonds that are issued by
the U.S. government. These bonds are effectively loans provided by the
public to the government and will vary in length. Some of these bonds are
as short as 60-day loans, while other bonds are loans that are paid over a
30-year period.
Corporate Bonds Right Ans - are issued by corporations to borrow
money from the public to cover the costs of investment in new projects.
Stock Right Ans - a share of ownership in a company.
Money market Right Ans - Market in which money is lent for periods of
less than a year
Capital market Right Ans - Market in which money is lent for periods
longer than a year
primary market Right Ans - a market in which new issues of securities
are offered to the public
secondary market Right Ans - the market in which previously issued
securities are traded among investors
Limit vs. market order Right Ans - Market order to buy/sell: best
available price @ moment in time for an immediate purchase or sale of
stock
Limit order: specific price you set @ which you are willing to either buy or
sell stock, does not limit losses
, Milton Friedman Right Ans - He was a famous American economist. He
strongly promoted the idea of free trade and condemned government
regulation and socialism.
U.S. Securities and Exchange Commission (SEC) Right Ans - government
agency that enforces securities laws designed to promote full public
disclosure, protect investors and maintain the integrity of the markets i.e. a
federal agency that regulates the trade of stock
What are the purposes of financial markets? Right Ans - To provide
liquidity and determine prices.
dealer market Right Ans - This is a form of a secondary market, which
are markets utilized for trading securities after their initial issuance.
Depository Vs. Non Depository Financial institutions Right Ans -
Depository institutions offer loans to individuals and organizations in the
form of mortgages, auto loans, personal loans, and so on. Example- banks,
credit unions, and savings institutions
Non-depository services offer instead of accepting deposits, these
organizations act as an intermediary between savers and lenders. Example-
mortgage brokerage firm, brokerage firms, investment firms, mutual funds,
and hedge funds
What is the primary role of financial institutions? Right Ans - To
conduct financial transactions such as investments, loans, and deposits.
Financial institutions conduct transactions to circulate money.
Central banks Right Ans - government banks that manage, regulate, and
protect both the money supply and the banks
Federal Reserve Bank
Banks and credit unions Right Ans - businesses where people and other
businesses save, borrow, and exchange money
Accounting vs. Finance Right Ans - Accounting:
Tracks what happened to firm's money in the past
Financial Management:
Combines historical figures and current information
Determines what should happen with firm's money now and in the future
three primary areas in the world of finance Right Ans - -Business
finance the financial management of a business enterprise. AKA-
managerial finance, financial management, and organizational finance.
-Investments the action or process of investing money for profit or material
result.
-Financial institutions businesses that provide banking services to
consumers and businesses
Utility Right Ans - Ability or capacity of a good or service to be useful
and give satisfaction to someone.
What should be the main question a firm asks when considering any
investment decision? Right Ans - Do the benefits of this investment
outweigh the costs?
three main tasks that a financial manager of a firm does in order to achieve
the goal of the firm Right Ans - -making investment decisions,
-making financing decisions, and
-managing working capital.
Corporate Finance Right Ans - the study of the relationship between
business decisions and the value of the stock in the business
highest-ranking officer in corporate finance is typically the chief financial
officer (CFO)
Investment Banking Right Ans - The primary tasks of an analyst are
preparing presentations, performing financial analyses of companies, and
doing administrative tasks. They spend a lot of time creating PowerPoint
presentations, called pitch books. Some of the tasks that investment banks
,perform are mergers and acquisitions, corporate offerings, and sales and
trading. Those who are promoted become senior bankers, such as vice
presidents and managing directors.
Private Equity (PE) Right Ans - a general term that includes angel
investors, venture capitalists, and takeover firms. It is termed "private"
equity because it deals with investments in firms that are privately held
and whose ownership is not yet bought or sold on any public stock
exchange. It is common for private equity firms to engage in buyouts or
what are called leveraged buyouts (LBOs). Similar to hedge funds, PE offers
the potential of very high compensation.
Commercial Banking Right Ans - a financial institution that accepts
deposits; offers checking and savings accounts and other basic financial
products; and extends various loans, such as auto loans and home
mortgages.
Financial Planning Right Ans - Professional financial planners work with
individuals to help them achieve their financial goals. Financial planners
often help clients create budgets and prepare for retirement. An important
role of financial planners is to help direct their clients' investments. It is
typical for financial planners to also help with tax planning, such as setting
up trusts, estates, and wills. Will likely require you to obtain the
professional designation of Certified Financial Planner (CFP).
Real Estate Right Ans - There are many common jobs in the field of
insurance: agent/broker, underwriter, loss adjuster, risk manager, claims
investigator, actuary, appraiser, and more.
Finance Is Right Ans - the management and allocation of capital or
money with the objective of investing, forecasting, budgeting, saving,
borrowing, and lending.
New bonds Right Ans - Debt
Bonds are the vehicles by which corporations raise debt capital. While
individuals go to a bank to borrow money, bonds are the primary means of
borrowing money in the corporate world. A firm that issues bonds is
borrowing money directly from investors on the market. When you buy a
,bond, you as an investor are loaning money to the firm that issued the
bond.
New stock Right Ans - equity
three most important Financial Securities Right Ans - -Treasury
securities
-Corporate bonds
-Stocks.
Treasury Securities Right Ans - are generally bonds that are issued by
the U.S. government. These bonds are effectively loans provided by the
public to the government and will vary in length. Some of these bonds are
as short as 60-day loans, while other bonds are loans that are paid over a
30-year period.
Corporate Bonds Right Ans - are issued by corporations to borrow
money from the public to cover the costs of investment in new projects.
Stock Right Ans - a share of ownership in a company.
Money market Right Ans - Market in which money is lent for periods of
less than a year
Capital market Right Ans - Market in which money is lent for periods
longer than a year
primary market Right Ans - a market in which new issues of securities
are offered to the public
secondary market Right Ans - the market in which previously issued
securities are traded among investors
Limit vs. market order Right Ans - Market order to buy/sell: best
available price @ moment in time for an immediate purchase or sale of
stock
Limit order: specific price you set @ which you are willing to either buy or
sell stock, does not limit losses
, Milton Friedman Right Ans - He was a famous American economist. He
strongly promoted the idea of free trade and condemned government
regulation and socialism.
U.S. Securities and Exchange Commission (SEC) Right Ans - government
agency that enforces securities laws designed to promote full public
disclosure, protect investors and maintain the integrity of the markets i.e. a
federal agency that regulates the trade of stock
What are the purposes of financial markets? Right Ans - To provide
liquidity and determine prices.
dealer market Right Ans - This is a form of a secondary market, which
are markets utilized for trading securities after their initial issuance.
Depository Vs. Non Depository Financial institutions Right Ans -
Depository institutions offer loans to individuals and organizations in the
form of mortgages, auto loans, personal loans, and so on. Example- banks,
credit unions, and savings institutions
Non-depository services offer instead of accepting deposits, these
organizations act as an intermediary between savers and lenders. Example-
mortgage brokerage firm, brokerage firms, investment firms, mutual funds,
and hedge funds
What is the primary role of financial institutions? Right Ans - To
conduct financial transactions such as investments, loans, and deposits.
Financial institutions conduct transactions to circulate money.
Central banks Right Ans - government banks that manage, regulate, and
protect both the money supply and the banks
Federal Reserve Bank
Banks and credit unions Right Ans - businesses where people and other
businesses save, borrow, and exchange money
