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WGU C708 Principles of Finance Practice Questions and Answers 2023 (Verified Answers) 1.An individual decides to sell corporate bonds to another investor.Which type of financial market or institution would be involved in this transaction?-
: ANS Retail securities firm
2.A firm wants to sell new shares of stock. Which other institution is involved in this type of transaction ANS investment banking firm 3.A partnership needs funds to purchase technology equipment. It will be able to repay those funds in under a year's time. Which organization should the partnership contact to obtain the needed funds ANS retail bank 4.Which type of transactions do financial institutions deal with ANS deposits 5.What is considered a financial institution ANS commercial bank 1 / 3
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6.Which situation is unethical ANS The investment manager publishes false invest- ment performance reports in hopes of convincing new investors to invest money.
7.The credit manager for a company is responsible for setting the company's credit policy regarding availability and limits for customers.What is one of the additional responsibilities of this credit manager ANS Collecting past-due accounts 8.Which activity is financial management responsible for ANS Ensuring suffi- cient financing is available 9.What is one of the main areas of the financial environment ANS Investments 10.What is a common challenge in the world of finance ANS It generally operates with a high degree of uncertainty.
11.Which variable must be considered when a corporation's finance 2 / 3
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depart- ment is determining the best strategy for financing a project ANS The amount of debt and equity financing currently in use 12.An individual is interested in establishing a lawn care business as a sole proprietorship. What will be a disadvantage of choosing this business model ANS Unlimited liability 13.What is one benefit of a sole proprietorship ANS The owner has uninterrupted control of the business.
14.What is a disadvantage of a general partnership ANS Owners' personal assets are not protected against claims of creditors.
15.What is one advantage of an LLC ANS Limited personal liability 16.What is an example of a potential principal-agent problem ANS Corporate executives buying other companies to expand their influence
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