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WGU D076 OBJECTIVE ASSESSMENT FINANCE SKILLS
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WGU D076 OBJECTIVE ASSESSMENT FINANCE SKILLS
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WGU D076 OBJECTIVE ASSESSMENT FINANCE SKILLSFOR MANAGERS NEWEST 2024 ACTUAL EXAM 300
QUESTIONS AND CORRECT DETAILED ANSWERS
(VERIFIED ANSWERS) |ALREADY GRADED A+
Which area of finance involves deciding which assets to invest in to create wealth in
the future? - ANSWER: Investments
What is the main goal of a firm? - ANSWER: To maximize owner wealth
What are the financial managers doing if they evaluate whether it is worth spending
money on research and development for a new product? - ANSWER: Making an
investment decision
Which type of financial market is where securities such as stocks and bonds are
traded after their initial issuance? - ANSWER: Secondary Financial Market
What type of financial institution is an insurance company? - ANSWER: Contractual
Which financial institutions invest funds contributed by a company to provide
retirement funds for the company's employees? - ANSWER: Pension Fund
Personal income is which type of economic indicator? - ANSWER: Coincident
Which term refers to something that conforms with accepted standards of conduct
that guide a person's behavior? - ANSWER: Ethical
What is the second step in finding a solution to an ethical dilemma? - ANSWER:
Consider alternative courses of action
How can agency problems be reduced through corporate control? - ANSWER:
Executive compensation
What are the main services offered by financial institutions? - ANSWER: Accepting a
wide variety of deposits, offering investment products, providing loans, and
brokering financial transactions.
What is the main objective of personal financial goals? - ANSWER: To maximize
individual utility.
Which task does the financial manager of a firm perform that involves the issuance
of new stocks and bonds? - ANSWER: Making financing decisions
, Why is understanding the definition of finance important in managing personal
finances? - ANSWER: It helps individuals compare the costs and benefits of an action
to determine whether to take that action.
In which type of market would a company issue bonds or stocks for the first time? -
ANSWER: Primary Market
Which type of financial institution is a mutual fund? - ANSWER: Investment
institution
Which financial institution specializes in managing and administering retirement
funds? - ANSWER: Pension funds
Which type of economic indicator is the consumer price index? - ANSWER: Lagging
indicator
What does the term ethical refer to? - ANSWER: The accepted standards of conduct
that guide a person's behavior
A company officers and board of directors are selling their stocks in the firm at
higher prices due to false accounting reports that made the stock seem more
valuable than it truly was. Which ethical issue is occurring in this situation? -
ANSWER: Agency problems due to conflicting interests
What is the name for the interest rate expressed on an annual basis? - ANSWER:
Annual percentage rate
Why is the required rate of return also known as the "hurdle rate"? - ANSWER: It is
the minimum rate that a firm must surpass to accept a project
What is the inflation rate? - ANSWER: The rate at which the average price level of a
basket of goods and services in an economy increases
What does the risk-free rate indicate? - ANSWER: Inflation and Opportunity Cost
Suppose Sophia is considering a new stock investment for her retirement account.
This stock has significant risk, but is quite popular in the market. Inflation for the
next few years is expected to be 2-3% per year, and the current U.S. Treasury rates
are about 2%. How should she use this information to decide what type of return she
can expect from the stock? - ANSWER: Based on the inflation rate, she should expect
this stock to provide a return higher than this for the associated risk.
Twenty years ago, Mateo started an investment account with $2,000. He then
invested $100 into the account every month at the end of each month. Today, he
has $46,528 in the same account. What is the term for the $100 monthly cash flows?
- ANSWER: Annuity
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