WGU D076 Finance Skills for Managers

WGU D076 Finance Skills for Managers 10 studiers recently 5.0 (1 review) Students also studied Terms in this set (171) Social SciencesEconomics Finance Save WGU D076 Finance Skills for Manag...375 terms infinitedrifterPreview Finance Skills for Managers - D076 58 terms martinatraPreview Finance Skills for Managers - D076 200 terms Rampaging_Apostro... Preview WGU D 250 term mal What is a reasonable alternative to keeping an emergency stash of cash?Investing in a savings account Investing in a readily withdrawable account that still earns some interest is a value-preserving alternative.Which area of finance deals with sources of funding and the capital structure of corporations and seeks to increase the value of a firm to its owners?Business finance is the area of finance that deals with uses and sources of funding to increase the value of the firm.What is the primary difference between finance and accounting?Finance focuses on the future, while accounting is generally backward-looking.Which subspecialty of finance primarily involves deciding which assets will create more wealth and earn positive returns?Investments is the area of finance that seeks to create wealth in the future by deciding where to allocate money.What is the primary goal of the financial manager of a firm?To maximize owner wealth.The financial manager should make decisions based on the primary goal of maximizing owner wealth.What should be the main question a firm asks when considering any investment decision?Do the benefits of this investment outweigh the costs?For any investment, you should expect to receive a benefit worth at least as much as the initial cost.What is the primary aim of personal finance goals? To maximize satisfaction from products purchased and services obtained. The objective of personal financial goals is to maximize one's utility.Which task does a financial manager perform when choosing to obtain a loan to purchase a piece of equipment for a new project?Making financing decisions.The manager is deciding where to get the funds to support a new project, which means the manager is making a financing decision.

Which financial career focuses on investing capital into firms whose shares are not currently sold on any public stock exchange?Private equity deals with investments in firms that are privately held and whose ownership is not yet bought or sold on any public stock exchange.Which task does a financial manager perform when assessing the costs and benefits of potential projects?Making investment decisions Managing working capital means overseeing day-to-day operations and cash flows.What tool can you use to understand your overall personal cash flows?Budgeting helps you to understand your income and expenses and to analyze your cash flows.You want to buy a house, so you obtain a mortgage for which you can afford the monthly payments. What process have you engaged in as part of your financial decision-making?Financing Part of the personal finance process is figuring out how to finance your goals in a way that is within your means What area of finance involves deciding which assets to invest in to create wealth in the future?Investments Investments are an area of finance that involves deciding which assets to invest in to create wealth in the future.Hannah is the financial manager of a firm. A project that she has recommended has been approved and will cost $5 million. Since the company does not have enough cash on reserve, Hannah must figure out how to raise enough money to start the project. She can choose whether to issue new bonds, new stocks, a mortgage loan, or some combination of those options. What task is Hannah performing in this scenario?Making a financing decision Since the project has already been approved, Hannah is trying to find a way to finance the investment and considering its capital structure.Maria and Mateo are setting financial goals. They decide that they need to save $200 each month to reach their goal of taking their children to visit their grandparents in Spain next summer. What is the objective of setting such a goal?To maximize individual utility While everyone has different personal financial goals, the objectives of such goals is to maximize individual utility Which professional works with individuals to help them achieve their financial goals?Financial planner Professional financial planners work with individuals to help them achieve their financial goals.Omar is about to purchase a new car for $30,000. He knows he wants to buy the car, but he is still trying to decide how to pay for it. He has barely over $30,000 in his bank account. He can either take out an auto loan from a bank or use a mix of cash and an auto loan. In this scenario, what is Omar doing?Financing a goal He has already made a decision to purchase the car and is now deciding on financing options.What are the purposes of financial markets?The purposes of financial markets are to provide liquidity and to determine prices.In which financial market are securities such as stocks and bonds are traded after their initial issuance?Secondary market Financial securities are first sold in the primary financial market and then traded among investors in the secondary financial market.

What kind of market primarily allows institutions to borrow and lend in the short term?Money market Assets in money markets are typically highly liquid and intended for use within a year or less.A local start-up company just hit its five-year anniversary and is planning an initial public offering sometime this year. In order to issue public stock, which market will the company use?Primary market When a company issues stock for the first time to raise capital, shares must initially be sold through a primary market.What is the primary role of financial institutions? To conduct financial transactions such as investments, loans, and deposits What is a depository institution?An institution that accepts and pays interest on deposits of money, as well as extends loans Which financial institution ensures that a nation's economy remains healthy by controlling the amount of money circulating in the economy?Central banks control the supply of money in the economy How do insurance companies pay policyholders when a claim is made?Insurance companies invest the money that they earn from premiums into stocks and bonds, and then the returns are used to fill claims.Which type of financial institution deals mainly with providing for retirement through employers?Pension fund A large corporation is looking to merge with another large corporation. Which financial institution can help them do this?Investment banks facilitate complex financial deals, like mergers.Unemployment rate is which type of economic indicator? Lagging indicators change after the economy changes.The Federal Reserve sometimes adjusts the interest rate at which commercial banks can borrow from it. What is the purpose of adjusting the interest rate?Regulating inflation and unemployment is the main objective of the Federal Reserve and central banks, and it is accomplished by adjusting the interest rate.What would an inverted yield curve signal?An inverted yield curve reflects the expectation that the economy will have low or negative growth in the future.In what way are coincident indicators useful?They are analyzed during economic shifts to provide information about the current state of the economy.Which responsibility is a focus of the U.S. Securities and Exchange Commission?To protect investors The responsibilities of SEC are to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation.Which type of financial institution provides individuals and firms access to financial markets?Investment institutions

Which financial institution includes entities that receive money from institutional investors and wealthy individuals to buy troubled companies to improve them and earn returns by selling them or going public?Private equity Yield curve is which type of economic indicator? Leading About a year ago, the short-term Treasury bill had 1.54% interest and the long-term Treasury note had 2.54% interest. This week, the 1-year Treasury bill has an interest rate of 3.13%, while the 10-year Treasury note has an interest rate of 2.28%. What does this information indicate about the future economy?It may indicate an economic downturn.Which term reflects a person's beliefs about right and wrong, good and bad, or just and unjust?Moral reflects one's beliefs about right and wrong, good and bad, or just and unjust.What characterizes an ethical action?An ethical action is based on accepted standards of conduct.Lucas is a financial advisor working for Bullzai, Inc. He is faced with a dilemma. Bullzai has started changing its practices in order to increase profit. As a financial advisor, he is now supposed to suggest to clients to invest in portfolios that will not do as well as the portfolios that Bullzai is invested in. This is an accepted practice done by other businesses in the industry, and it complies with all standards set by the government. However, Lucas knows that this practice is not in his clients' best interest. What type of dilemma is Lucas facing?Moral This is not a legal issue because the new practice complies with the law, and it is not an ethical issue because it is a commonly accepted practice within the industry. It is a moral issue because it deals with Lucas’s own sense of right and wrong.Which type of error would result in a set repercussion or penalty given by the government?Legal Nora is an investment manager, which means that she is paid to invest other people's money. To meet her goal for the month, she is seeking to invest money from clients in an investment that is risky but potentially has a higher return. What about this situation represents an ethical dilemma?Nora is considering investing in a risky asset just to meet her monthly goal.Nora is caught between the obligation to meet her goal and the obligation to keep her clients’ money safe. As an investment manager, she is obligated to do what is best for the client.What are the effects of attempting to maximize shareholder value for a business in an unethical way?It often leads to decreased shareholder value for the business.