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WGU D076 ALL POSSIBLE QUESTIONS AND ANSWERS NEW YEAR SOLVED 100%
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WGU D076 ALL POSSIBLE QUESTIONS AND ANSWERS NEW YEAR SOLVED 100%
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WGU D076 ALL POSSIBLE QUESTIONS AND ANSWERS NEW YEAR 2024-2025 SOLVED 100%Which area of finance deals with sources of funding and the capital structure of corporations and seeks to increase the value of a firm to its owners?
Financial institutions
Business finance
Investments
Real estate Answer- Business finance is the area of finance that deals with uses and sources of funding to increase the value of the firm.
What is the primary difference between finance and accounting?
Accounting focuses on the future, while finance is generally backward-looking.
Finance provides financial data to decision makers, and accounting involves making decisions using that data.
Accounting involves investing and forecasting, while finance summarizes a company's financial information. Answer- Finance focuses on the future, while accounting is generally backward-looking. Finance is the management and allocation of capital with the objectives of investing, forecasting, budgeting, saving, lending, and borrowing.
Which subspecialty of finance primarily involves deciding which assets will create more wealth and earn positive returns?
Accounting
Financial institutions
Capital structure
Investments Answer- Investments. Investments is the area of finance that seeks to create wealth in the future by deciding where to allocate money.
What is the primary goal of the financial manager of a firm?
To minimize the asset holdings of the firm
To minimize the costs of the firm
To maximize owner wealth
To maximize the manager's utility Answer- To maximize owner wealth. The financial manager should make decisions based on the primary goal of maximizing owner wealth.
What should be the main question a firm asks when considering any investment decision? Answer- Do the benefits of this investment outweigh the costs? For any investment, you should expect to receive a benefit worth at least as much as the initial cost. What is the primary aim of personal finance goals? Answer- To maximize satisfaction from products purchased and services obtained
Which task does a financial manager perform when choosing to obtain a loan to purchase a piece of equipment for a new project?
Making credit standard decisions
Making investment decisions
Making inventory control decisions
Making financing decisions Answer- Making financing decisions. The manager is deciding where to get the funds to support a new project, which means the manager is making a financing decision.
Which financial career focuses on investing capital into firms whose shares are not currently sold on any public stock exchange?
Private equity
Financial planning
Insurance
Corporate finance Answer- Private equity deals with investments in firms that are privately held and whose ownership is not yet bought or sold on any public stock exchange.
Which task does a financial manager perform when assessing the costs and benefits of potential projects?
Managing working capital
Making financing decisions
Making investment decisions
Implementing financial policies Answer- Making investment decisions. Understanding how benefits weigh up against costs is the first priority before moving forward with financing and managerial decisions.
What tool can you use to understand your overall personal cash flows?
Setting financial goals
Budgeting
Investing
Saving Answer- Budgeting helps you to understand your income and expenses and to analyze your cash flows.
What is a reasonable alternative to keeping an emergency stash of cash?
Investing in a savings account
Investing the money in a nicer car
Investing in high-risk growth stocks
Investing in long-term bonds Answer- Investing in a savings account. Investing in a readily withdrawable account that still earns some interest is a value-preserving alternative. You want to buy a house, so you obtain a mortgage for which you can afford the monthly payments. What process have you engaged in as part of your financial decision-making?
Analyzing data
Financing
Assessing
Investing Answer- Financing. Part of the personal finance process is figuring out how to finance your goals in a way that is within your means.
What area of finance involves deciding which assets to invest in to create wealth in the future?
Investments
Organizational finance
Financial institutions
Investment banking Answer- 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?
Making an investment decision
Managing financial investments
Managing working capital
Making a financing decision 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?
To minimize personal expenses
To set priorities in personal finances
To maximize individual utility
To make personal finances predictable 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?
Commercial banker
Corporate financial analyst
Private equity manager
Financial planner 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?
Budgeting
Investing to achieve a goal
Financing a goal
Assessing a financial goal Answer- Financing a goal. He has already made a decision to purchase the car and is now deciding on financing options.
What are the purposes of financial markets?
To provide liquidity and determine prices
To affect the distribution of income for investors
To maintain fair, orderly, and efficient markets
To willingly take risk and capture returns Answer- To provide liquidity and determine prices. The purposes of financial markets are to provide liquidity and to determine prices.
Leverage Multiplier Answer- leverage multiplier of 2 is less than the industry average of 3.2. This implies that the firm is more conservatively financed than much of the industry (or in other words, it uses less debt than other companies).
In which financial market are securities such as stocks and bonds are traded after their initial issuance?
Secondary market
Primary market
Initial market
Dealer market Answer- Secondary market. Financial securities are first sold in the primary financial market and then traded among investors in the secondary financial market.
What kind of market primarily allows institutions to borrow and lend in the short term?
Futures and options markets
Capital market
Primary market
Money market Answer- Money market. Assets in money markets are typically highly liquid and intended for use within a year or less.
A local start-up company just hit its five-year anniversary and is planning an initial public
offering sometime this year. In order to issue public stock, which market will the company use?
Dealer market
Futures and options market
Secondary market
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