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Test your basic knowledge |
CSM Financial Management
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Study First
Subjects
:
certifications
,
csm
,
business-skills
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
Treasury notes
Inflation risk
Asset allocation
Why investors purchase corporate bonds
2. Investing in something that could have a risk of a world wide issue
Inflation risk
Global investment risk
Other funds
Advantages of bonds
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
Defensive stock
Diversification
Convertible preferred stock
Treasury bills
4. Written promise to pay with legal conditions (indenture) - face value - maturity date - interest rate=coupon rate - trustee
Market order
Characteristics of corporate bonds
Bond funds
Treasury notes
5. Illiquidity - declining property values - lack of diversification - long depreciation period - management problems - syndicate investment is not a tax shelter
Your role in the investment process
Google Fimamce
Disadvantage of real estate
Treasury bonds
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
Conservative risk
Iinvestors choose precious metals
Provisions for repayment
Characteristics of corporate bonds
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
Disadvantages of bonds
Advantages of real estate
Iinvestors choose precious metals
Other funds
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
Advantages of bonds
Iinvestors choose precious metals
Why investors purchase corporate bonds
Convertible preferred stock
9. Income from dividends - potential stock split - appreciation of stock value
Moderate risk
Iinvestors choose precious metals
Why investors purchase common stock
Cyclical stock
10. A marketable fixed interest U.S. government debt security with a maturity of more than 10 years
Other funds
Treasury bonds
Disadvantage of real estate
Diversification
11. Company could fail - market volatility - uncertain yield - management time required - risk
Primary markets
Disadvantages of stocks
Bond funds
Defensive stock
12. Stocks buy& hold - dollar cost averaging - direct investment and DRIPS
Long term techniques
Google Fimamce
Types of bonds
Liquidity
13. An equity security that pays regular often steadily increases dividends and offers a high yield that may generate the majority of overall returns
Characteristics of a mutual fund
Financial check up
Income stock
Primary markets
14. The process of selecting investments with a higher risk in order to profit from an anticipated price movement
Speculative investment
Other funds
Why corp issue common stock
Disadvantage of real estate
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
Treasury bonds
Interest rate risk
Secondary markets
Why investors purchase corporate bonds
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)
Characteristics of a mutual fund
Investment theories
Disadvantages of bonds
Government bond
17. A market that exists between companies and financial institutions that is used to raise equity capital for the companies
Characteristics of corporate bonds
Secondary markets
Obtaining money to inves
Equity capital
18. A marketable U.S. government debt security with a fixed interest rate and a maturity between one and 10 years
Mutual fund
Corporate bond
Treasury notes
Your role in the investment process
19. Diversification - affordability - professional management - liquidity - low transaction costs - no disadvantages
Interest rate risk
Stop order
Advantages of mutual funds
Stock funds
20. A lot of risk is involved
Google Fimamce
Aggressive risk
Risk return trade-off
Advantages of bonds
21. Not much risk is involved
Conservative risk
Diversification
Market order
Provisions for repayment
22. Shares in a company whose earnings are expected to grow at an above average rate relative to the market
Growth stock
Speculative investment
Diversification
Advantages of mutual funds
23. A portfolio management strategy and model for investing in fixed income that involves purchasing multiple bonds - each with different maturity dates
Bond laddering
Market order
Long term techniques
Moderate risk
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
Asset allocation
Treasury bills
Disadvantages of stocks
Bond funds
25. An order to buy or sell a security when it's price surpasses a certain point
Stop order
Provisions for repayment
Conservative risk
Speculative investment
26. Stocks Day trading - margin buying - selling short - option trading
Diversification
Short term techniques
Convertible preferred stock
Interest rate risk
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
Why investors purchase mutual funds
Your role in the investment process
Investment Goals
Provisions for repayment
28. A short term debt obligation backed by the U.S. government with a maternity of less than one year
Features of real estate
Treasury bills
Equity capital
Global investment risk
29. Direct: primary and secondary residences - commercial property - undeveloped land - foreclosures - Indirect: real estate syndicates - limited partnerships - real estate investment trusts - mortgages - participation certificates
Why investors purchase mutual funds
Classification of real estate investments
Financial check up
Conservative risk
30. A debt security issued by a corporation and sold to investors - higher risk higher risk and government bond
Advantages of stocks
Corporate bond
Disadvantage of real estate
Convertible preferred stock
31. Primary residence: you hold legal title - place to live - mortage interest is tax deductible - usually an inflation hedge - beware of housing bubbles
Bond laddering
Investment Goals
Features of real estate
Market order
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
Why investors purchase mutual funds
Features of real estate
Conservative risk
Your role in the investment process
33. Corporate earnings - earnings per share - price earnings rato (PE) - dividend payout - dividend yield - total return - beta - market to book ratio
Characteristics of a mutual fund
Disadvantage of real estate
Advantages of bonds
Numerical measures for stocks
34. A nationally recognized - well-established and financially sound company
Blue chip
Bond laddering
Stock funds
Why investors purchase common stock
35. Online research about listed companies
Other funds
Google Fimamce
Obtaining money to inves
Disadvantage of real estate
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
Why corp issue common stock
Iinvestors choose precious metals
Income stock
Stock funds
37. Call feature - sinking fund - serial redemption
Provisions for repayment
Stop order
Google Fimamce
Classification of real estate investments
38. Investing stock in a company and having the risk that it will shut down
Defensive stock
Secondary markets
Advantages of real estate
Business failure risk
39. Evaluate potential investments - seek assistance if needed - monitor the value of investments - keep accurate and current records - consider tax consequences of selling
Your role in the investment process
Risk return trade-off
Numerical measures for stocks
Advantages of stocks
40. A stock that rises quickly when economic growth is strong and falls rapidly when growth is slowing down
Liquidity
Primary markets
Income stock
Cyclical stock
41. A risk management technique that mixes a wide variety of invests within a portfolio
Diversification
Cumulative stock
Bond funds
Obtaining money to inves
42. A debt security issued by a government spending most often issued in the country's domestic currency
Other funds
Limit order
Equity capital
Government bond
43. A stock that provides a constant dividend and stable earnings regardless of the state of the overall stock market
Inflation risk
Defensive stock
Limit order
Bond funds
44. Initial public offerings - investment banks
Characteristics of corporate bonds
Short term techniques
Stock funds
Primary markets
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
Risk return trade-off
Google Fimamce
Market order
Treasury bonds
46. An order placed with a brokerage to buy or sell a set number of shares at a specific price or better
Blue chip
Advantages of bonds
Conservative risk
Limit order
47. Medium amount of risk is involved
Income stock
Moderate risk
Primary markets
Classification of real estate investments
48. Asset allocation funds - balanced funds - value funds - money market funds - life cycle funds - funds of funds
Market risk systematic
Defensive stock
Short term techniques
Other 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
Obtaining money to inves
Disadvantages of stocks
Why investors purchase common stock
Government bond
50. Interest rate risk - face value volatility - no hedge against inflation - principal does not appreciate - difficult to compound
Inflation risk
Disadvantages of bonds
Risk return trade-off
Convertible preferred stock