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WGU Financial-Management Practice Q&A's

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WGU Financial-Management Exam Syllabus Topics:

SectionObjectives
Topic 1: Risk and Return- Portfolio risk and diversification
- Expected return
Topic 2: Financial Statement Analysis- Financial ratios
- Cash flow analysis
- Balance sheet and income statement interpretation
Topic 3: Time Value of Money- Present and future value calculations
- Annuities and perpetuities
Topic 4: Capital Budgeting- Net present value (NPV)
- Internal rate of return (IRR)
- Payback period analysis
Topic 5: Cost of Capital and Valuation- Bond and stock valuation basics
- Weighted average cost of capital (WACC)

WGU Financial Management VBC1 Sample Questions:

Question #1

A start-up company ' s lender is concerned that the company may not be able to meet its financial obligations.
It asks the company to provide it with information regarding its current assets and current liabilities.
Which information would the start-up company need to provide to the lender?

  • A. Obligations that require cash within the next year
  • B. Long-term debt obligations payable to the bank
  • C. Depreciation of equipment the firm uses for its daily operations
  • D. Investments that the firm plans to hold for more than one year
Reveal Solution  Discussion  0

Correct Answer: A  🗳️

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Question #2

What is systematic risk in the capital asset pricing model (CAPM)?

  • A. The risk associated with poor diversification
  • B. The market-wide risk that affects all securities
  • C. The risk associated with specific companies
  • D. The risk of losing the entire investment
Reveal Solution  Discussion  0

Correct Answer: B  🗳️

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Question #3

What is a primary benefit of maintaining inventory?

  • A. Reduces a company's storage costs
  • B. Allows companies to meet customer demand
  • C. Decreases the cost of goods sold
  • D. Increases the cash conversion cycle
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Correct Answer: B  🗳️

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Question #4

What is the purpose of covenants in a bond indenture?

  • A. To set the interest rate of the bond
  • B. To determine the par value of the bond and the current price at which the bond will sell today
  • C. To calculate the coupon payments
  • D. To outline the actions the issuer commits to take or avoid to protect bondholders' interests
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Correct Answer: D  🗳️

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Question #5

What does a beta of less than 1 signify in the capital asset pricing model (CAPM)?

  • A. The investment has lower risk than the market.
  • B. The investment is risk-free.
  • C. The investment has higher risk than the market.
  • D. The investment has a return that is independent of the market.
Reveal Solution  Discussion  0

Correct Answer: A  🗳️

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