WGU C214 FINANCIAL MANAGEMENT PRE-
ASSESSMENT EXAM UPDATED AND REVISED IN
2025-2026 DECEMBER
Which best describes the goal of a corporation? - ANSWER >Balance risk
and profit to maximize the stock price
How does collateralization impact the yield of a bond? -
ANSWER ->Lower yield due to less default risk
The holder of which bonds are last in line in bankruptcy? - ANSWER -
>subordinated debenture
What is a 10-K? - ANSWER ->A firm's annual report to the SEC
What makes the present value of bond cash inflows equal to the
purchase price? - ANSWER ->Yield
How does the IRS income statement differ from GAAP? - ANSWER -
>Expense recognition occurs in different time periods
Which type of bond has tax exempt interest payments? - ANSWER -
>municipal bonds
Which feature is not in the Indenture - ANSWER ->The price Which is
the best stock investment principle? - ANSWER >Maximize the return-
to-risk ratio
,If a firm automates its production line, which ratio is impacted?
- ANSWER ->Quick Ratio
If a firm wished to decrease financial leverage, it would - ANSWER ->Buy
back bonds
If interest rates increase, what is the impact on WACC? - ANSWER ->It
increases
The sum of dividends and addition to retained earnings equals -
ANSWER ->Net Income
What structure causes profitability to be volatile? - ANSWER >Leverage
Which ratio is used in working capital management? - ANSWER
->Current Ratio
Which type of ratio analysis compares a firm to its competitors?
- ANSWER ->Cross section
When is revenue recognized in accrual accounting? - ANSWER -
>When the product is shipped or delivered
What is the term for the present value of stock cash flows? - ANSWER -
>Intrinsic value
In which market transaction does a corporation receive cash? -
ANSWER ->Primary
, A measure of a security's risk is - ANSWER ->The range of possible
returns, Beta, and Duration
Which of the following is the "best" investment"? - ANSWER -
>Depends on risk preferences of the investor
What is meant by "risk-return trade-off"? - ANSWER ->As risk increases,
required return increases
What happens to APY as the number of interest periods increases? -
ANSWER ->It increases
If a firm believes that the market under-values its stock, it
should - ANSWER ->Buy back stock
Corporate financial decision-making should be based on - ANSWER -
>Market values
The goal of a corporation is to: - ANSWER ->Enhance shareholder value
To whom do you complain about stock broker sales practices? -
ANSWER ->FINRA
The Volker rule affects what activity - ANSWER ->Hedge fund
investment
If rating agencies downgrade a bond, - ANSWER ->Its price decreases
The Payout Ratio is defined as - ANSWER ->Dividends-to-net income
ASSESSMENT EXAM UPDATED AND REVISED IN
2025-2026 DECEMBER
Which best describes the goal of a corporation? - ANSWER >Balance risk
and profit to maximize the stock price
How does collateralization impact the yield of a bond? -
ANSWER ->Lower yield due to less default risk
The holder of which bonds are last in line in bankruptcy? - ANSWER -
>subordinated debenture
What is a 10-K? - ANSWER ->A firm's annual report to the SEC
What makes the present value of bond cash inflows equal to the
purchase price? - ANSWER ->Yield
How does the IRS income statement differ from GAAP? - ANSWER -
>Expense recognition occurs in different time periods
Which type of bond has tax exempt interest payments? - ANSWER -
>municipal bonds
Which feature is not in the Indenture - ANSWER ->The price Which is
the best stock investment principle? - ANSWER >Maximize the return-
to-risk ratio
,If a firm automates its production line, which ratio is impacted?
- ANSWER ->Quick Ratio
If a firm wished to decrease financial leverage, it would - ANSWER ->Buy
back bonds
If interest rates increase, what is the impact on WACC? - ANSWER ->It
increases
The sum of dividends and addition to retained earnings equals -
ANSWER ->Net Income
What structure causes profitability to be volatile? - ANSWER >Leverage
Which ratio is used in working capital management? - ANSWER
->Current Ratio
Which type of ratio analysis compares a firm to its competitors?
- ANSWER ->Cross section
When is revenue recognized in accrual accounting? - ANSWER -
>When the product is shipped or delivered
What is the term for the present value of stock cash flows? - ANSWER -
>Intrinsic value
In which market transaction does a corporation receive cash? -
ANSWER ->Primary
, A measure of a security's risk is - ANSWER ->The range of possible
returns, Beta, and Duration
Which of the following is the "best" investment"? - ANSWER -
>Depends on risk preferences of the investor
What is meant by "risk-return trade-off"? - ANSWER ->As risk increases,
required return increases
What happens to APY as the number of interest periods increases? -
ANSWER ->It increases
If a firm believes that the market under-values its stock, it
should - ANSWER ->Buy back stock
Corporate financial decision-making should be based on - ANSWER -
>Market values
The goal of a corporation is to: - ANSWER ->Enhance shareholder value
To whom do you complain about stock broker sales practices? -
ANSWER ->FINRA
The Volker rule affects what activity - ANSWER ->Hedge fund
investment
If rating agencies downgrade a bond, - ANSWER ->Its price decreases
The Payout Ratio is defined as - ANSWER ->Dividends-to-net income
