Test your basic knowledge |

CSM Financial Management

Instructions:
  • Answer 50 questions in 15 minutes.
  • If you are not ready to take this test, you can study here.
  • Match each statement with the correct term.
  • Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. An investment strategy that aims to balance risk and reward by apportioning a portfolio's assets according to an individual's goal






2. Investing in something that could have a risk of a world wide issue






3. Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares after a predetermined date






4. Written promise to pay with legal conditions (indenture) - face value - maturity date - interest rate=coupon rate - trustee






5. Illiquidity - declining property values - lack of diversification - long depreciation period - management problems - syndicate investment is not a tax shelter






6. Hedge against inflation - safe haven during political or economic upheavals - need a storage place - can be risky-not easy to turn to cash - difficult to appraise






7. Possible hedge against inflation - easy purchase on indirect ownership - limited financial responsibility for indirect ownership - financial leverage - positive cash flow - no management concerns on indirect ownership






8. High interest rate than savings account - safe return of principles - less volatile than stocks - regular income - diversification of portfolio - low purchase price - ease of management - municipal bonds are tax free






9. Income from dividends - potential stock split - appreciation of stock value






10. A marketable fixed interest U.S. government debt security with a maturity of more than 10 years






11. Company could fail - market volatility - uncertain yield - management time required - risk






12. Stocks buy& hold - dollar cost averaging - direct investment and DRIPS






13. An equity security that pays regular often steadily increases dividends and offers a high yield that may generate the majority of overall returns






14. The process of selecting investments with a higher risk in order to profit from an anticipated price movement






15. Interest income: -paid semiannually on most bonds registered bonds - bearer bonds - zero coupon bonds - dollar appreciation of bond value - bond repayment at maturity: -bond laddering






16. Close ended funds (2%): shares are traded limited and must purchase from another investor -exchange trade funds (6%): tied to a specfic index - open end funds (92%): shares issued and redeemed by the company at net asset value (NAV)






17. A market that exists between companies and financial institutions that is used to raise equity capital for the companies






18. A marketable U.S. government debt security with a fixed interest rate and a maturity between one and 10 years






19. Diversification - affordability - professional management - liquidity - low transaction costs - no disadvantages






20. A lot of risk is involved






21. Not much risk is involved






22. Shares in a company whose earnings are expected to grow at an above average rate relative to the market






23. A portfolio management strategy and model for investing in fixed income that involves purchasing multiple bonds - each with different maturity dates






24. High yield funds ( junk bonds) - long term corporate - long term U.S. - intermediate corporate - intermediate U.S. - short term corporate - short term U.S. - municipal bonds - world bond funds






25. An order to buy or sell a security when it's price surpasses a certain point






26. Stocks Day trading - margin buying - selling short - option trading






27. 1. What will you use money for 2. how much will you need 3. how long will it take 4. are there obstacles 5. will you make sacrifices 6. what if you don't reach the goal






28. A short term debt obligation backed by the U.S. government with a maternity of less than one year






29. Direct: primary and secondary residences - commercial property - undeveloped land - foreclosures - Indirect: real estate syndicates - limited partnerships - real estate investment trusts - mortgages - participation certificates






30. A debt security issued by a corporation and sold to investors - higher risk higher risk and government bond






31. Primary residence: you hold legal title - place to live - mortage interest is tax deductible - usually an inflation hedge - beware of housing bubbles






32. Combines funds of investors and invests those monies in a diversified portfolio of securities issued by corporations or governments that meet the fund objective






33. Corporate earnings - earnings per share - price earnings rato (PE) - dividend payout - dividend yield - total return - beta - market to book ratio






34. A nationally recognized - well-established and financially sound company






35. Online research about listed companies






36. To raise money for start up - on going activities or expansion - no repayment required - dividends are not mandatory - they lose some control of the company through voting rights






37. Call feature - sinking fund - serial redemption






38. Investing stock in a company and having the risk that it will shut down






39. Evaluate potential investments - seek assistance if needed - monitor the value of investments - keep accurate and current records - consider tax consequences of selling






40. A stock that rises quickly when economic growth is strong and falls rapidly when growth is slowing down






41. A risk management technique that mixes a wide variety of invests within a portfolio






42. A debt security issued by a government spending most often issued in the country's domestic currency






43. A stock that provides a constant dividend and stable earnings regardless of the state of the overall stock market






44. Initial public offerings - investment banks






45. An order that an investor makes through a broker or brokerage service to buy or sell an investment immediately at the best available current price






46. An order placed with a brokerage to buy or sell a set number of shares at a specific price or better






47. Medium amount of risk is involved






48. Asset allocation funds - balanced funds - value funds - money market funds - life cycle funds - funds of funds






49. Pay yourself and make investing automatic - save extra funds like gifts - partcipate in your employeers retirement plan - make installment payments to yourself - break a habit - get a part-time job






50. Interest rate risk - face value volatility - no hedge against inflation - principal does not appreciate - difficult to compound