128 Finance Skills for Managers - D076 Exam Questions With Revised Answers
5 views 0 purchase
Course
WGU D076
Institution
WGU D076
128 Finance Skills for Managers - D076
Exam Questions With Revised Answers
What area of finance involves deciding which assets to invest in to create wealth in the future? -
answerInvestments
(Investments are an area of finance that involves deciding which assets to invest in to create
wealth ...
128 Finance Skills for Managers - D076
Exam Questions With Revised Answers
What area of finance involves deciding which assets to invest in to create wealth in the future? -
answer✔✔Investments
(Investments are an area of finance that involves deciding which assets to invest in to create
wealth in the future.)
Hannah is the financial manager of a firm. A project that she has recommended has been
approved and will cost $5 million. Since the company does not have enough cash on reserve,
Hannah must figure out how to raise enough money to start the project. She can choose whether
to issue new bonds, new stocks, a mortgage loan, or some combination of those options.
What task is Hannah performing in this scenario? - answer✔✔Making a financing decision
(Since the project has already been approved, Hannah is trying to find a way to finance the
investment and considering its capital structure.)
Maria and Mateo are setting financial goals. They decide that they need to save $200 each month
to reach their goal of taking their children to visit their grandparents in Spain next summer.
What is the objective of setting such a goal? - answer✔✔To maximize individual utility
(While everyone has different personal financial goals, the objectives of such goals is to
maximize individual utility.)
Which professional works with individuals to help them achieve their financial goals? -
answer✔✔Financial planner
(Professional financial planners work with individuals to help them achieve their financial
goals.)
Omar is about to purchase a new car for $30,000. He knows he wants to buy the car, but he is
still trying to decide how to pay for it. He has barely over $30,000 in his bank account. He can
either take out an auto loan from a bank or use a mix of cash and an auto loan.
In this scenario, what is Omar doing? - answer✔✔Financing a goal
(He has already made a decision to purchase the car and is now deciding on financing options.)
Which responsibility is a focus of the U.S. Securities and Exchange Commission? -
answer✔✔To protect investors
(The responsibilities of SEC are to protect investors; maintain fair, orderly, and efficient
markets; and facilitate capital formation.)
Which type of financial institution provides individuals and firms access to financial markets? -
answer✔✔Investment institutions
(Investment institutions provide both individuals and firms access to financial markets.)
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? - answer✔✔Private equity
(This is the role of a buyout private equity firm.)
Yield curve is which type of economic indicator? - answer✔✔Leading
(Leading indicators change before the economy changes.)
About a year ago, the short-term Treasury bill had 1.54% interest and the long-term Treasury
note had 2.54% interest. This week, the 1-year Treasury bill has an interest rate of 3.13%, while
the 10-year Treasury note has an interest rate of 2.28%.
What does this information indicate about the future economy? - answer✔✔It may indicate an
economic downturn.
(Since the long-term Treasury interest rate is lower than the short-term rate, it has an inverted
yield curve, which may indicate an economic downturn.)
What does the term legal describe? - answer✔✔An action that is in accordance with the laws and
rules set by an authority.
(Legal means to follow the laws and rules set by an authority.)
Jack is a personal financial advisor. He is with a new client, and the client is asking him what he
recommends for her portfolio. Jack knows that his firm's investment product performed well last
year, but its performance changes from year to year—some years it is better than the market, and
some years it is not. Also, the fee to invest in the product is higher than the fee to invest in a
market index fund. If Jack sells his company's investment product, the customer's loyalty to the
company is doubled.
Which actions should Jack take? - answer✔✔Give a personal recommendation of the company's
product while explaining its performance relative to the market over the past several years.
(Giving a recommendation to sell a product is fine, but you should never hide other information.
Sharing information about index funds and comparing your product to others is a fair action to
take for the client.)
Why might a manager manipulate accounting procedures? - answer✔✔To make the company's
performance look good
(A manager might manipulate accounting procedures to inflate the earnings of a company, which
would optimize bonuses and stock-price-related benefits for management.)
Which situation is an example of an agency problem? - answer✔✔Managers follow their own
interests instead of the owners' interest.
(An agency problem occurs when the agent (a manager) does not act in the best interest of the
owners.)
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Brightstars. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $10.49. You're not tied to anything after your purchase.
