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. 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






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






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






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






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






6. 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)






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






8. 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






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






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






11. 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






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






13. 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






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






15. Call feature - sinking fund - serial redemption






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






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






18. Fundamental analysis - technical analysis - efficient market theory






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






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






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






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






23. 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






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






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






26. 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






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






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






29. 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






30. Securities exchanges - over the counter market






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






32. 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






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. Medium amount of risk is involved






35. Not much risk is involved






36. 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






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






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






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






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






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






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






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






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






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






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






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






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






49. 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






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