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






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






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






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






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






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






7. Securities exchanges - over the counter market






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






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






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






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






12. 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)






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






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






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






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






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






18. Not much risk is involved






19. 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






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






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






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






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






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






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






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






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






30. Medium amount of risk is involved






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






32. Call feature - sinking fund - serial redemption






33. 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






34. 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






35. 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






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






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






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






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






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






41. 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






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






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






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






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






46. Initial public offerings - investment banks






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






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






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






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