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WGU D076 OBJECTIVE ASSESSMENT FINANCE
SKILLS FOR MANAGERS NEWEST 2024 ACTUAL
EXAM 300 QUESTIONS AND CORRECT
DETAILED ANSWERS (VERIFIED ANSWERS )
|ALREADY GRADED A+
Which task does a financial manager perform when assessing the costs and benefits of potential projects? - ANSWER- Making investment decisions -Understanding how benefits weigh up against costs is the first priority before moving forward with financing and managerial decisions.
What does the term legal describe? - ANSWER- An action that is in accordance with the laws and rules set by an authority. -
Jack is a personal financial advisor. He is with a new client, and the client is asking him what he recommends for her portfolio.Jack knows that his firm's investment product performed well last year, but its performance changes from year to year—some years it is better than the market, and some years it is not. Also, the fee to invest in the product is higher than the fee to invest in a market index fund. If Jack sells his company's investment product, the customer's loyalty to the company is doubled.Which actions should Jack take? - ANSWER- Give a personal 1 / 4
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recommendation of the company's product while explaining its performance relative to the market over the past several years.- Giving the recommendation to sell a product is fine, but you should never hide other information. Sharing information about index funds and comparing your product to others is a fair action to take for the client.
Why might a manager manipulate accounting procedures? - ANSWER- To make the company's performance look good - A manager might manipulate accounting procedures to inflate the earnings of a company, which would optimize bonuses and stock-price-related benefits for management.
Which situation is an example of an agency problem? - ANSWER- Managers follow their own interests instead of the owners' interest. - An agency problem occurs when the agent (a manager) does not act in the best interest of the owners.
A company is trying to finance a project with a mortgage loan from a bank. The company's assessment of the project indicates that the company may experience several years of loss until the project becomes profitable. This means that the company might lose its ability to pay back the loan and the interest on the mortgage. What action might the bank take to protect its interest? - ANSWER- Set a strict covenant that the company cannot easily achieve. - By setting a strict covenant, there is a 2 / 4
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risk that the company may not meet its obligation, which would deter the company from taking on risky projects.
What are the main services offered by financial institutions? - ANSWER- Accepting a wide variety of deposits, offering investment products, providing loans, and brokering financial transactions -Financial institutions such as banks, insurance companies, and mutual fund companies provide these services.
What is the main objective of personal financial goals? - ANSWER- To maximize individual utility -You set goals and act to increase your satisfaction or happiness by taking care of necessities and achieving priorities.
Which task does the financial manager of a firm perform that involves the issuance of new stocks and bonds? - ANSWER- Making investing decisions -Making investment decisions does not involve the issuance of new stocks and bonds.
Why is understanding the definition of finance important in managing personal finances? - ANSWER- It helps individuals compare the costs and benefits of an action to determine whether to take that action. -Any financial decision should make sense in terms of its costs and benefits.
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In which type of market would a company issue bonds or stocks for the first time? - ANSWER- Primary market -This is the purpose of a primary market.
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Which type of financial institution is a mutual fund? - ANSWER- Investment institution - Investment institutions provide individuals and firms access to financial markets.
Which financial institution specializes in managing and administering retirement funds? - ANSWER- Pension funds - Pension funds specialize in retirement funds.
Which type of economic indicator is the consumer price index? - ANSWER- Lagging indicator - CPI usually changes after the economy as a whole changes.
What does the term ethical refer to? - ANSWER- The accepted standards of conduct that guide a person's behavior -Ethical refers to the accepted standards of conduct that guide a person's behavior.
A company's officers and board of directors are selling their stocks in the firm at higher prices due to false accounting reports that made the stock seem more valuable than it truly was. Which
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