WGU D076 QUESTIONS AND ANSWERS
Business finance - Answer -Which area of finance deals with sources of funding and
the capital structure of corporations and seeks to increase the value of a firm to its
owners?
Finance focuses on the future, while accounting is generally backward-looking. -
Answer -What is the primary difference between finance and accounting?
Investments - Answer -Which subspecialty of finance primarily involves deciding which
assets will create more wealth and earn positive returns?
Investments - Answer -An area of finance that deals with investment allocation and
asset pricing.
Financial Institutions - Answer -An area of finance that involves organizations that
accept deposits, offer investment products, loan money, or broker financial transactions.
making investment decisions,
making financing decisions, and
managing working capital. - Answer -What are three main tasks that a financial
manager of a firm does in order to achieve the goal of the firm, which is to maximize
shareholder wealth?
CFO, Chief Financial Officer - Answer -Who is the highest ranking officer in corporate
finance?
The CFO is responsible for all the financial decisions made by the firm. He or she
serves as the CEO's right-hand person in all money matters and oversees the financial
analysis and decision-making of the firm. - Answer -What does the CFO do?
Making investment decisions - Answer -Which task does a financial manager perform
when assessing the costs and benefits of potential projects?
Private equity - Answer -Which financial career focuses on investing capital into firms
whose shares are not currently sold on any public stock exchange?
Making financing decisions - Answer -Which task does a financial manager perform
when choosing to obtain a loan to purchase a piece of equipment for a new project?
Treasury, Corporate, and Stocks - Answer -What are the three most important types of
securities?
To protect Investors - Answer -Why does the SEC oversee Financial Markets?
,To provide liquidity and determine prices - Answer -What are the purposes of financial
markets?
Secondary market - Answer -In which financial market are securities such as stocks
and bonds are traded after their initial issuance?
Money market - Answer -What kind of market primarily allows institutions to borrow and
lend in the short term?
Primary market - Answer -A local start-up company just hit its five-year anniversary and
is planning an initial public offering sometime this year. In order to issue public stock,
which market will the company use?
An institution that accepts and pays interest on deposits of money, as well as extends
loans - Answer -What is a depository institution?
Corporate Finance. - Answer -An area of finance that involves activities used to
increase shareholder wealth.
To maximize satisfaction from products purchased and services obtained - Answer -
What is the primary aim of personal finance goals?
Do the benefits of this investment outweigh the costs? - Answer -What should be the
main question a firm asks when considering any investment decision?
To maximize owner wealth - Answer -What is the primary goal of the financial manager
of a firm?
To conduct financial transactions such as investments, loans, and deposits - Answer -
What is the primary role of financial institutions?
Investment bank - Answer -A large corporation is looking to merge with another large
corporation. Which financial institution can help them do this?
Pension fund - Answer -Which type of financial institution deals mainly with providing
for retirement through employers?
They use returns from stocks and bonds. - Answer -How do insurance companies pay
policyholders when a claim is made?
Central bank - Answer -Which financial institution ensures that a nation's economy
remains healthy by controlling the amount of money circulating in the economy?
Leading, Lagging, and coincident - Answer -What are the three types of economic
indicators?
, Lagging - Answer -Unemployment rate is which type of economic indicator?
To regulate inflation and unemployment - Answer -The Federal Reserve sometimes
adjusts the interest rate at which commercial banks can borrow from it. What is the
purpose of adjusting the interest rate?
It may indicate an economic downturn. - Answer -What would an inverted yield curve
signal?
They are analyzed during economic shifts to provide information about the current state
of the economy. - Answer -In what way are coincident indicators useful?
To protect investors - Answer -Which responsibility is a focus of the U.S. Securities and
Exchange Commission?
Investment institutions - Answer -Which type of financial institution provides individuals
and firms access to financial markets?
Private equity - Answer -Which financial institution includes entities that receive money
from institutional investors and wealthy individuals to buy troubled companies to
improve them and earn returns by selling them or going public?
Leading - Answer -Yield curve is which type of economic indicator?
Legal - Answer -Which type of error would result in a set repercussion or penalty given
by the government?
Moral - Answer -Lucas is a financial advisor working for Bullzai, Inc. He is faced with a
dilemma. Bullzai has started changing its practices in order to increase profit. As a
financial advisor, he is now supposed to suggest to clients to invest in portfolios that will
not do as well as the portfolios that Bullzai is invested in. This is an accepted practice
done by other businesses in the industry, and it complies with all standards set by the
government. However, Lucas knows that this practice is not in his clients' best interest.
What type of dilemma is Lucas facing?
An ethical action is based on accepted standards of conduct. - Answer -What
characterizes an ethical action?
Moral - Answer -Which term reflects a person's beliefs about right and wrong, good and
bad, or just and unjust?
Accounting - Answer -The system of recording, reporting, and summarizing past
financial information and transactions.
Accounts Receivable Turnover (AR Turnover) - Answer -An activity ratio found by credit
sales divided by accounts receivable.
Business finance - Answer -Which area of finance deals with sources of funding and
the capital structure of corporations and seeks to increase the value of a firm to its
owners?
Finance focuses on the future, while accounting is generally backward-looking. -
Answer -What is the primary difference between finance and accounting?
Investments - Answer -Which subspecialty of finance primarily involves deciding which
assets will create more wealth and earn positive returns?
Investments - Answer -An area of finance that deals with investment allocation and
asset pricing.
Financial Institutions - Answer -An area of finance that involves organizations that
accept deposits, offer investment products, loan money, or broker financial transactions.
making investment decisions,
making financing decisions, and
managing working capital. - Answer -What are three main tasks that a financial
manager of a firm does in order to achieve the goal of the firm, which is to maximize
shareholder wealth?
CFO, Chief Financial Officer - Answer -Who is the highest ranking officer in corporate
finance?
The CFO is responsible for all the financial decisions made by the firm. He or she
serves as the CEO's right-hand person in all money matters and oversees the financial
analysis and decision-making of the firm. - Answer -What does the CFO do?
Making investment decisions - Answer -Which task does a financial manager perform
when assessing the costs and benefits of potential projects?
Private equity - Answer -Which financial career focuses on investing capital into firms
whose shares are not currently sold on any public stock exchange?
Making financing decisions - Answer -Which task does a financial manager perform
when choosing to obtain a loan to purchase a piece of equipment for a new project?
Treasury, Corporate, and Stocks - Answer -What are the three most important types of
securities?
To protect Investors - Answer -Why does the SEC oversee Financial Markets?
,To provide liquidity and determine prices - Answer -What are the purposes of financial
markets?
Secondary market - Answer -In which financial market are securities such as stocks
and bonds are traded after their initial issuance?
Money market - Answer -What kind of market primarily allows institutions to borrow and
lend in the short term?
Primary market - Answer -A local start-up company just hit its five-year anniversary and
is planning an initial public offering sometime this year. In order to issue public stock,
which market will the company use?
An institution that accepts and pays interest on deposits of money, as well as extends
loans - Answer -What is a depository institution?
Corporate Finance. - Answer -An area of finance that involves activities used to
increase shareholder wealth.
To maximize satisfaction from products purchased and services obtained - Answer -
What is the primary aim of personal finance goals?
Do the benefits of this investment outweigh the costs? - Answer -What should be the
main question a firm asks when considering any investment decision?
To maximize owner wealth - Answer -What is the primary goal of the financial manager
of a firm?
To conduct financial transactions such as investments, loans, and deposits - Answer -
What is the primary role of financial institutions?
Investment bank - Answer -A large corporation is looking to merge with another large
corporation. Which financial institution can help them do this?
Pension fund - Answer -Which type of financial institution deals mainly with providing
for retirement through employers?
They use returns from stocks and bonds. - Answer -How do insurance companies pay
policyholders when a claim is made?
Central bank - Answer -Which financial institution ensures that a nation's economy
remains healthy by controlling the amount of money circulating in the economy?
Leading, Lagging, and coincident - Answer -What are the three types of economic
indicators?
, Lagging - Answer -Unemployment rate is which type of economic indicator?
To regulate inflation and unemployment - Answer -The Federal Reserve sometimes
adjusts the interest rate at which commercial banks can borrow from it. What is the
purpose of adjusting the interest rate?
It may indicate an economic downturn. - Answer -What would an inverted yield curve
signal?
They are analyzed during economic shifts to provide information about the current state
of the economy. - Answer -In what way are coincident indicators useful?
To protect investors - Answer -Which responsibility is a focus of the U.S. Securities and
Exchange Commission?
Investment institutions - Answer -Which type of financial institution provides individuals
and firms access to financial markets?
Private equity - Answer -Which financial institution includes entities that receive money
from institutional investors and wealthy individuals to buy troubled companies to
improve them and earn returns by selling them or going public?
Leading - Answer -Yield curve is which type of economic indicator?
Legal - Answer -Which type of error would result in a set repercussion or penalty given
by the government?
Moral - Answer -Lucas is a financial advisor working for Bullzai, Inc. He is faced with a
dilemma. Bullzai has started changing its practices in order to increase profit. As a
financial advisor, he is now supposed to suggest to clients to invest in portfolios that will
not do as well as the portfolios that Bullzai is invested in. This is an accepted practice
done by other businesses in the industry, and it complies with all standards set by the
government. However, Lucas knows that this practice is not in his clients' best interest.
What type of dilemma is Lucas facing?
An ethical action is based on accepted standards of conduct. - Answer -What
characterizes an ethical action?
Moral - Answer -Which term reflects a person's beliefs about right and wrong, good and
bad, or just and unjust?
Accounting - Answer -The system of recording, reporting, and summarizing past
financial information and transactions.
Accounts Receivable Turnover (AR Turnover) - Answer -An activity ratio found by credit
sales divided by accounts receivable.
