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C 201 / C201 Objective Assessment (Latest Update 2025 / 2026) Business Acumen | All Section Test Questions and Answers | Grade A | 100% Correct (Verified Answers) - WGU

Question:

A company with a good reputation in the financial market wants to raise funds for expansion. For this, the company issues bonds that are not backed by any collateral.

Which type of bond has the company issued in this scenario?

Answer:

The company has issued debentures in the given scenario. Debentures are backed by a company's general financial reputation, not a pledge of company assets.

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Question:

A privately-owned cloud storage company has issued securities in the primary market to acquire the capital for funding the development and launch of a new product.

Which type of securities has the company issued to raise funds from the financial market in the given scenario?

Answer:

The company has issued an initial public offering (IPO). An IPO refers to the first-time issuance of stock for sale to the public by a company.

Question:

A manufacturer needs cash to meet its short-term liabilities. To raise funds, it issues securities that will mature in six months.

Which financial market instrument does the manufacturer use to raise funds in this scenario?

Answer:

The company uses commercial paper to raise funds. Commercial paper is a short-term, low-risk security that companies issue to raise short-term capital.Commercial paper matures in less than a year.

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Question:

A logistics company plans to increase its trucking fleet by 30% in the next three years. The financial manager must create a financial plan for this duration.

What are the three questions the financial manager must find the answers to before developing the financial plan?

Answer:

What funds will be needed, when will they be needed, and where will the money come from?

The amount, timing, and resource are the three things that a financial plan must address.

Question:

How does the Federal Reserve System (Fed) increase the amount of money banks have to lend to businesses?

Answer:

By reducing the percentage of deposits the banks must hold on to at any point.The Fed increases the amount available to banks for lending to businesses by reducing reserve requirements.

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Question:

A sporting goods manufacturing company is expanding its production capacity by 15% to keep up with the growing demand. The chief executive officer (CEO) has asked the chief financial officer (CFO) to make the financial plan for the expansion.

What is the first thing the CFO needs to do to prepare the financial plan?

Answer:

Create a forecast of sales and revenue

Forecasting of sales and revenue is the first step in financial planning. The method used for forecasting varies and depends on the type of business.

Question:

What happens to the growth rate of the money supply when the Federal Reserve System (Fed) sells foreign currencies?

Answer:

It slows down.The Fed can regulate the supply of money by selling or buying foreign currencies. By selling foreign currencies, the Fed reduces bank reserves, leading to a decrease in the growth rate of the money supply.

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