WGU C214 Final Preparation Exam Questions with Complete Marking Scheme 2024
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Course
WGU C214
Institution
WGU C214
WGU C214 Final Preparation Exam Questions with Complete Marking Scheme 2024
Increased Frequency in compounding leads to what? - correct answer Increase frequency in compounding leads to an increase in APY
Treasury bonds - correct answer Are taxed at a federal level while municipal bonds a...
WGU C214 Final Preparation Exam Questions
with Complete Marking Scheme 2024
Increased Frequency in compounding leads to what? - correct answer Increase frequency in compounding leads to an increase in APY
Treasury bonds - correct answer Are taxed at a federal level while municipal bonds are tax free.
Two benefits of unbundling and offshoring - correct answer 1. It reduces the costs and results in higher sales and employment.
2. Allows for sale of intermediate and final goods at lower prices and increases employment.
Two basic types of financial instruments - correct answer Stocks and bonds
Primary markets - correct answer Are where companies directly sells securities to investors (IPO: I
Secondary markets - correct answer Securities are sold from third parties such as the NYSE or Nasdaq.
When do companies not need permission from SEC to sell debt and equity? - correct answer 1. Regulation S: when they sell to foreign investors.
2. Rule 144A: when they sell to a large institutional investor. Dodd-Frank Act (2009 After 2008 Financial Crises regulates the banking industry) -
correct answer Dodd-Frank created the Financial Stability Oversight Council, does an annual stress test on banks.
Volcker Rule - correct answer Limits investment in hedge funds by banks.
Sarbanes-Oxley Act (2002 after massive fraud) - correct answer Requires companies to Have strong internal audit controls, prepare honest and accurate financial statements.
FINRA (Financial Industry Regulatory Authority) - correct answer Regulates US stock brokers also need to maintain up to date sales records.
Foreign Corrupt Practices Act 1977 (FCPA) - correct answer Prohibits bribing of foreign officials.
DFL: Degree of Financial Leverage - correct answer Is a ratio that measures the sensitivity of a company's earnings per share to fluctuations in its operating incomes, as a result of changes in its capital structure.
Earnings per Share (EPS) - correct answer Is a portion of a company's profit allocated to each outstanding share of common stock. It serves as an indicator of a company's profitability.
What does the Degree of Financial Leverage Indicate? - correct answer The reliance on debt.
DOL: Degree of Operating Leverage aka Business Risk - correct answer The more
fixed costs a company has in its operating structure, the more fixed costs they would have, sometimes called business risk. Working Capital Management: Short Term Liquidity - correct answer refers to a company's managerial accounting strategy designed to monitor and utilize the two components of working capital, current assets and current liabilities, to ensure the most financially efficient operation of the company.
What should a company do to manage working capital? - correct answer Collect
quickly and pay slowly.
What is used to manage working capital? - correct answer Current Ratio, Cash Ratio, Receivable Turnover
How can a firm speed up collections of cash from customers? - correct answer Offer customers discounts if they pay early and through electronic check processing.
Ratio Analysis - correct answer Is a quantitative analysis of information contained in a company's financial statements. Ratio analysis is used to evaluate various aspects of a company's operating and financial performance such as its efficiency, liquidity, profitability and solvency.
Liquidity Ratios - correct answer Measures short term liquidity.
Current Ratio = Current assets/Current Liabilities
What ratio is used to measure short term liquidity? - correct answer Current ratio measures short term liquidity for a firm.
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