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WGU D076 Exam Questions with 100% Correct Answers | Latest Update
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WGU D076 Exam Questions with 100% Correct Answers | Latest Update Interest rate - percentage of the principal that a lender charges a borrower for the use of assets. Cost of capital - Also known as Discount rate, the cost to a firm to use an investor's capital Simple interest - Annual Interes...

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  • September 17, 2024
  • 11
  • 2024/2025
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WGU D076 Exam Questions with 100%

Correct Answers | Latest Update


Interest rate - ✔✔percentage of the principal that a lender charges a

borrower for the use of assets.

Cost of capital - ✔✔Also known as Discount rate, the cost to a firm to use

an investor's capital

Simple interest - ✔✔Annual Interest = Principal x Interest Rate

Total interest - ✔✔Total Interest = Annual interest x t

Compounding Interest - ✔✔otal Interest = Principal x (1+Interest Rate/over/

¿ ¿Numbers of periods - Principal

Required rate of return - ✔✔the rate of return or compensation that an

investor or a lender will accept for investments such as stocks, bonds, or

loans.

hurdle rate - ✔✔The word compensation is used because this is the rate

that investors or lenders will be compensated for a given level of risk

associated with investments or loans.

, Opportunity cost - ✔✔the loss of potential gain from other alternatives

when one alternative is chosen.

Risk - ✔✔possibility that the realized or actual return will differ from the

expected return.

Inflation - ✔✔the rate at which the average price level of goods and

services in an economy increases over a period of time.

Sources of inflation - ✔✔1:Increased demand for goods and services

2:Rising costs

3:Adaptive expectations- when prices of goods and services go up,

employees expect and even demand higher wages to maintain their

standard of living.

Decomposing Interest Rate - ✔✔Rate = Risk-Free Rate + Risk Premium

Real rate - ✔✔same as the growth rate in purchasing power, even though

the formula seems different. This is call the Fisher Effect, an economic

theory created by the economist Irving Fisher.

Why Are Ratios Useful - ✔✔1. Standardization- Ratios standardize

financial data to make them comparable across firms, even those of

distinctly different sizes.

2. Flexibility

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