C214 WGU Financial Management End of Section Questions with Expert Solutions

Economics is a subfield of Finance (t/f) 1.1 F. Finance is a subfield of Economics. (right answer) Which of the following is not an example of firm capital? 1.1 Financial markets Which of the following are examples of firm capital? 1.1 Cash, Labor, Machinery Capital is defined as a financial asset. (t/f) 1.1 T. Capital is defined as a financial asset. Corporate finance is devoted to understanding various types of financial instruments. (t/f) 1.1 F. Investments is devoted to understanding various types of financial instruments. (right answer) Which of the following is an example of firm capital? 1.1 Cash Corporate finance focuses on the decision making by the management of the firm. (t/f) 1.1 T. Corporate finance focuses on the decision making by the management of the firm. What are the three important areas of finance discussed in this section?1.1 Corporate Finance, Investments, and Banking/financial institutions Banks make money when interest rates they charge to borrowers are less than interest rates they pay depositors. (t/f) 1.1 F. Banks make money when interest rates they charge to borrowers are MORE than interest rates they pay depositors. (right answer) Stocks and bonds are two types of financial instruments. t/f 1.1 T. Stocks and bonds are two types of financial instruments. Stock represents ownership in a particular company. t/f 1.2 T. Stock represents ownership in a particular company. Companies can raise capital by issuing bonds or stocks. t/f 1.2 T. Companies can raise capital by issuing bonds or stocks.