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






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






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






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






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






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






7. Call feature - sinking fund - serial redemption






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






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






10. By make a risky investment you can be returned with a lot of money or losing some






11. The degree to which an asset or security can be bought or sold in the market without affecting the asset's price






12. 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






13. Fundamental analysis - technical analysis - efficient market theory






14. The uncertainty over the future real value (after inflation) of your investment






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






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






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






18. Securities exchanges - over the counter market






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






20. 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






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






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






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






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






25. 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






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






27. 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






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






29. The risk that an investments value will change due to the change due to the change in the absolute level of interest rates






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






31. Medium amount of risk is involved






32. A type of preferred stock with a provision that stipulates that if any dividends have been omitted in the past they must be paid out to preferred stockholders before common shareholders can receive dividends






33. The risk inherent to the entire market or entire market segment unsystematic: company or industry specific risk that is inherent in each investment






34. A lot of risk is involved






35. Aggressive growth funds - equity income funds - global stock funds - growth stock funds - index funds - international funds - large cap funds - mid cap funds - small cap funds - regional funds - sector funds - socially responsible funds






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






37. Initial public offerings - investment banks






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






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






40. 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)






41. An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks and bonds






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






43. Balance your budget including an account for investments - pay off credit cards - start an emergency fund - have access to other cash for emergencies






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






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






46. 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






47. 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






48. 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






49. 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






50. 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