WGU D775
Objective Assessment
- Version Exams
Pass on the first attempt.
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It includes two full versions of the Objective Assessment 2 Version Exams with Verified Answers designed to help you ace the exam in 2025. Learners preparing for business-related assessments Anyone who needs clear, concise guidance to pass
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Table of Contents D775 Objective Assessment Exam V1 ................................. 2 D775 Objective Assessment Exam V2 ............................... 58
D775 Objective Assessment Exam V1
### 1. Which principle guides business finance to optimize resource use?
- Principle of diversification
- Time value of money
- Risk-return tradeoff
- Capital structure theory
Correct Answer: C. Risk-return tradeoff
Expert Rationale:
The risk-return tradeoff is a fundamental finance principle stating that to achieve higher returns, an investor or business must accept higher risk. In business finance, this guides decisions to balance risk exposure with anticipated returns, effectively optimizing how limited resources are 2 / 4
allocated for maximum benefit. Understanding this tradeoff is essential in capital budgeting and investment decisions, aligning resource use with organizational risk tolerance and return expectations.
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### 2. Which activity describes capital raising in business finance?
- Securing funding for business operations and projects
- Managing daily cash flows
- Paying dividends to shareholders
- Setting monetary policy
Correct Answer: A. Securing funding for business operations and projects
Expert Rationale:
Capital raising involves obtaining funds to finance business activities such as expansion or operations, typically through debt, equity, or hybrid instruments. This is a core finance function enabling businesses to grow and sustain operations by accessing external or internal financial resources.
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### 3. Which finance activity involves the creation, circulation, and management of money?
- Capital budgeting
- Financial reporting
- Setting monetary policy
- Risk management
Correct Answer: C. Setting monetary policy
Expert Rationale:
Monetary policy, typically conducted by central banks, governs the money supply and interest rates to stabilize the economy, impacting liquidity, inflation, and employment levels. While corporate finance manages money within a company, the broader economic creation and control of money rest with monetary policy.
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### 4. What is common stock?
- A bond with fixed interest payments
- A share of ownership in a firm with voting rights
- A stock that pays fixed dividends
- A government security
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