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






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






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






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






5. Fundamental analysis - technical analysis - efficient market theory






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






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






8. Securities exchanges - over the counter market






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






10. 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






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






12. Cash dividends - price appearance - hedge against inflation - low minimum investment - limited liability - liquidity






13. 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






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






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






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






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






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






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






20. 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






21. Call feature - sinking fund - serial redemption






22. 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






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






24. Not much risk is involved






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






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






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






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






29. 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






30. Initial public offerings - investment banks






31. 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






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






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






34. Debenture bond - mortage bond - subordinated debenture bond - convertible bond - high yield bond






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






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






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






38. Medium amount of risk is involved






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






40. 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






41. An investment strategy that aims to balance risk and reward by apportioning a portfolio's assets according to an individual's goal






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






43. A lot of risk is involved






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






45. 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






46. 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






47. 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)






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






49. 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






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