WGU D076 Western Governors University

WGU D076

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199 term Sta Business financeWhich 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?Finance focuses on the future, while accounting is generally backward-looking.What is the primary difference between finance and accounting?InvestmentsWhich subspecialty of finance primarily involves deciding which assets will create more wealth and earn positive returns?InvestmentsAn area of finance that deals with investment allocation and asset pricing.Financial InstitutionsAn area of finance that involves organizations that accept deposits, offer investment products, loan money, or broker financial transactions.Corporate Finance.An area of finance that involves activities used to increase shareholder wealth.To maximize satisfaction from products purchased and services obtained What is the primary aim of personal finance goals?Do the benefits of this investment outweigh the costs? What should be the main question a firm asks when considering any investment decision?To maximize owner wealthWhat is the primary goal of the financial manager of a firm?making investment decisions, making financing decisions, and managing working capital.What are three main tasks that a financial manager of a firm does in order to achieve the goal of the firm, which is to maximize shareholder wealth?

CFO, Chief Financial OfficerWho is the highest ranking officer in corporate finance?The CFO is responsible for all the financial decisions made by the firm. He or she serves as the CEO's right- hand person in all money matters and oversees the financial analysis and decision-making of the firm.What does the CFO do?Making investment decisionsWhich task does a financial manager perform when assessing the costs and benefits of potential projects?Private equityWhich financial career focuses on investing capital into firms whose shares are not currently sold on any public stock exchange?Making financing decisionsWhich task does a financial manager perform when choosing to obtain a loan to purchase a piece of equipment for a new project?Treasury, Corporate, and StocksWhat are the three most important types of securities?To protect InvestorsWhy does the SEC oversee Financial Markets?To provide liquidity and determine pricesWhat are the purposes of financial markets?Secondary marketIn which financial market are securities such as stocks and bonds are traded after their initial issuance?Money marketWhat kind of market primarily allows institutions to borrow and lend in the short term?Primary marketA 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?An institution that accepts and pays interest on deposits of money, as well as extends loans What is a depository institution?To conduct financial transactions such as investments, loans, and deposits What is the primary role of financial institutions?Investment bankA large corporation is looking to merge with another large corporation. Which financial institution can help them do this?Pension fundWhich type of financial institution deals mainly with providing for retirement through employers?They use returns from stocks and bonds.How do insurance companies pay policyholders when a claim is made?Central bankWhich financial institution ensures that a nation's economy remains healthy by controlling the amount of money circulating in the economy?Leading, Lagging, and coincidentWhat are the three types of economic indicators?

LaggingUnemployment rate is which type of economic indicator?To regulate inflation and unemploymentThe Federal Reserve sometimes adjusts the interest rate at which commercial banks can borrow from it. What is the purpose of adjusting the interest rate?It may indicate an economic downturn.What would an inverted yield curve signal?They are analyzed during economic shifts to provide information about the current state of the economy.In what way are coincident indicators useful?To protect investorsWhich responsibility is a focus of the U.S. Securities and Exchange Commission?Investment institutionsWhich type of financial institution provides individuals and firms access to financial markets?Private equityWhich 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?LeadingYield curve is which type of economic indicator?LegalWhich type of error would result in a set repercussion or penalty given by the government?MoralLucas 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?An ethical action is based on accepted standards of conduct.What characterizes an ethical action?MoralWhich term reflects a person's beliefs about right and wrong, good and bad, or just and unjust?AccountingThe system of recording, reporting, and summarizing past financial information and transactions.Accounts Receivable Turnover (AR Turnover)An activity ratio found by credit sales divided by accounts receivable.Activity RatiosA category of ratios that measure how well a company uses its assets to generate sales or cash, showing the firm's operational efficiency and profitability.Additional Funds Needed (AFN)Another name for the discretionary financing needed or external financing needed. It represents the additional financing needed given a firm's expectations for future growth.

Affirmative CovenantsA bond covenant that describes things the company pledges itself to do in order to protect bondholders.Go To Agency CostsCosts that are incurred when management does not act in the best interest of shareholders.Agency ProblemWhen the agent (the management) does not act in the best interest of the principal (the owners).Go To Aggressive AssetsCompanies or securities with beta greater than 1.Annual Percentage RateThe annual interest rate that is charged for borrowing money or that is earned through investment.AnnuityA stream of cash flows of an equal amount paid every consecutive period.Go To Annuity DueA series of equal payments made at the beginning of consecutive periods.Go To Asset PricingThe process of valuing assets.Auction MarketA secondary market with a physical location and where prices are determined by investors' willingness to pay.Go To Average Collection Period (ACP)An activity ratio found by the number of days in a year (365) divided by AR turnover.Go To Balance Sheet ForecastingUsing sales growth and the profit forecast to construct a pro forma balance sheet to understand the future implications of the sources and uses of finances.Banks and Credit UnionsReceive deposits and extend loans to individuals and businesses.BenchmarkingThe process of completing a financial analysis to compare a firm's financial performance to that of other similar firms.BetaA variable that describes how the price of a security varies with the market.Bid-ask SpreadThe difference between the bid and ask prices that compensate the specialist for the risk that he or she bears for willingness to provide liquidity.Board of DirectorsA group of people who jointly supervise the activities of an organization.Bond IndentureA legal contract that governs the relationship between a firm and its bondholders.Go To BondholdersA person who loans a corporation money by buying debt securities.Go To Business FinanceAn area of finance that deals with sources of funding, the capital structure of corporations, the actions that managers take to increase the value of the firm to its owners, and the tools and analysis used to allocate financial resources.Go To