WGU C214 OA FINANCIAL MANAGEMENT EXAM

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WGU C214 OA FINANCIAL MANAGEMENT EXAM

ACTUAL EXAM A, B, C, D WITH STUDY GUIDE

QUESTIONS AND ANSWERS| EXCELLENT TOOL

FOR FINANCIALMANAGEM ENT STUDY

WGU C214 OA FINANCIAL MANAGEMENT EXAM A

What is the primary difference between accounting income and income for tax purposes?

• They are the same
• Income for tax is based on GAAP
• Income for tax based on IRS rules
• There is no difference

c Which is an important financial ratio in working capital management?

• Float
• ROE
• Net Margin
• Leverage

a If a firm's combined leverage is high, what is the implication?

• High equity ratio
• Profits are more volatile as sales fluctuate
• The firm is less profitable
• The two leverages offset each other - - neutral impact

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2 Which ratio analysis compares a firm's ratio to last year's ratios?

• Trend
• Cross section
• Geographic
• None of the above

a

The return to stock holders does not include:

• Dividend payments
• Capital gains
• Return of principal
• None of the above

c

The Prospectus is:

• Audited financial statements filed with SEC
• Firm's Annual Report
• Financial disclosure for security issuance
• Press release about prospective projects

c The Prospectus requirement was established in

• Dodd-Frank
• Sarbanes-Oxley
• Securities Act of 1933
• FINRE

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3 What type of bond can be exchanged for stock?

• Secured bond
• Subordinated debenture
• Convertible bond
• Exchange traded bond

c What is a market order?

• Order to sell stock only as long as the market is open today
• Order to sell stock with no price limitations
• Order to sell stock at a specified market level
• None of the above

b To evaluate a non-public company, what sources would you use?

• The financial statements filed with the SEC
• The latest stock price quoted in the Wall Street Journal
• The PE of a comparable public company
• The book value of equity in its balance sheet

c What should a company do to manage its working capital?

• Collect quickly and pay slowly
• Keep a large cash balance
• Maximize the use of long term investment
• Depreciate assets more slowly

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4 To maximize its stock price in the long-run, a firm must

• Maximize profits
• Avoid long-term risk investments
• Balance risk and return
• Minimize employee compensation

c As the number of interest compounding periods increases,

• APR increases
• APY increases
• APY is not affected
• APR becomes greater than APY

b If the yield of a bond is greater than the coupon rate, the price is

• Par
• Discount
• Variable
• Premium

d What is an asset-backed bond?

• Bond used to finance assets
• Bond collateralized by assets
• Subordinated debenture
• Debenture

b

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