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WGU D076 Finance Skills for Managers OA Prep Leave the first rating Students also studied Terms in this set (66) Western Governors UniversityBUS 2040 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 d076 af 31 terms llar
UNIT 2
What are the main services offered by financial institutions?
- Deciding which assets to invest in to create wealth in
- Soliciting charitable donations and then managing the
- Evaluating sources of funding for a business project,
- Accepting a wide variety of deposits, offering
- Accepting a wide variety of deposits, offering investment products, providing
the future
distribution of these funds
the capital structure of a firm, or actions managers could take to increase the value of the firm
investment products, providing loans, and brokering financial transactions
loans, and brokering financial transactions Correct! Financial institutions such as banks, insurance companies, and mutual fund companies provide these services.
UNIT 2
What is the main objective of personal financial goals?
- To maximize stock investments
- To maximize owner wealth
- To maximize charity donations
- To maximize individual utility
- To maximize individual utility
Correct! You set goals and act to increase your satisfaction or happiness by taking care of necessities and achieving priorities.
UNIT 2
Which task does the financial manager of a firm perform that involves the issuance of new stocks and bonds?
- Deciding on accounting standards
- Making financing decisions
- Managing working capital
- Making investing decisions
- Making financing decisions
Correct! Once investment decisions are made, a financial manager considers different possibilities of financing sources for the investments. This may include issuing new stocks and bonds.
UNIT 2
Why is understanding the definition of finance important in managing personal finances?
- It helps individuals act ethically with regard to finances.
- It helps individuals understand legal issues related to
- It helps individuals compare the costs and benefits of
- It allows individuals to find an investment with the
- It helps individuals compare the costs and benefits of an action to determine
finance.
an action to determine whether to take that action.
highest return possible.
whether to take that action.Correct! Any financial decision should make sense in terms of its costs and benefits.
UNIT 2
In which type of market would a company issue bonds or stocks for the first time?
- Dealer market
- Money market
- Secondary market
- Primary market
- Primary market
Correct! This is the purpose of a primary market.
UNIT 2
Which type of financial institution is a mutual fund?
- Federal institution
- Contractual institution
- Depository institution
- Investment institution
- Investment institution
Correct! Investment institutions provide individuals and firms access to financial markets.
UNIT 2
Which financial institution specializes in managing and administering retirement funds?
- Mutual funds
- Investment banks
- Private equity
- Pension funds
- Pension funds
Correct! Pension funds specialize in retirement funds.
UNIT 2
Which type of economic indicator is the consumer price index?
- Lagging indicator
- Coincident indicator
- Forecasting indicator
- Leading indicator
- Lagging indicator
Correct! CPI usually changes after the economy as a whole changes.
UNIT 2
What does the term ethical refer to?
- An idea or thing used as a measure, norm, or model in
- The accepted standards of conduct that guide a
- Following the laws and rules set by an authority
- One's beliefs about right and wrong, good and bad, or
- The accepted standards of conduct that guide a person's behavior
comparative evaluations
person's behavior
just and unjust
Correct! Ethical refers to the accepted standards of conduct that guide a person's behavior.
UNIT 2
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 ethical issue is occurring in this situation?
- Conflict between work and personal affairs
- Agency problem due to conflicting interests
- Pursuing individual interest over client interests
- Maximizing shareholder value
- Agency problem due to conflicting interests
Correct! Accounting manipulation by management in pursuit of higher stock- related compensation is an example of an agency problem.
UNIT 3
Task 1: Suppose you invested some money today into an
account that will pay 10% per year with the goal to have $100,000 (pull out) in 30 years. How much do you have to deposit today?
rate:
nper:
pmt:
fv:
type:
PV:
rate: 10%
nper: 30
pmt: 0
fv: 100,000
type: 0
PV: =pv(rate,nper,pmt,fv,type) = (-$5,730.86)
UNIT 3 - this is wrong
Task 2: What is the future value of the following annuity
due?Receiving $800 a year for 2 years compounded at 3.5% annually.
rate:
nper:
pmt:
pv:
type:
FV:
rate: 3.5
nper: 2
pmt: 800
pv: 0
type: 0
FV: =fv(rate,nper,pmt,fv,type) = (-$1,628)
UNIT 3
Task 3: What is the present value of the following stream
of cash flows at a discount rate of 6%?Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
CF $3,150 $4,320 $3,600 $2,340 $2,500 $2,850
Discount Rate: 6.0%
PV:
PV: =npv(rate,year1,year2,year3,year4,year5,year6)
=$15,569.89
UNIT 3
Task 4: What is the rate of return of an investment with the
following stream of cash flows?Year 0 Year 1 Year 2 Year 3 CFs -$2,250 $2,700 $2,100 $1,500
Rate of Return:
Year 0 Year 1 Year 2 Year 3 CFs -$2,250 $2,700 $2,100 $1,500
Rate of Return: =irr(year0,year1,year2,year3)
= 88.35%
UNIT 3
What is another name for the cost of capital?
- Discount rate
- Real rate
- Inflation rate
- Compound interest
- Discount rate
Correct. Cost of capital, discount rate, required rate, and interest rate are the same thing with different names based on different perspectives.
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