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






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






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






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






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






6. Call feature - sinking fund - serial redemption






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






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






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






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






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






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






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






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






15. 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






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






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






18. Not much risk is involved






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






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






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






22. 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






23. 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






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






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






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






27. 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






28. 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






29. 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






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






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






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






33. 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






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






35. 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)






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






37. 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






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






39. Initial public offerings - investment banks






40. A lot of risk is involved






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






42. 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






43. Medium amount of risk is involved






44. Fundamental analysis - technical analysis - efficient market theory






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






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






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






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






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






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