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






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






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






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






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






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






7. 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






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






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






10. 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






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






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 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. 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






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






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






17. 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






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






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






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






21. 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






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






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






24. 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






25. Online research about listed companies






26. 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






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






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






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






30. Call feature - sinking fund - serial redemption






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






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






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






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






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






36. 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)






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






38. A lot of risk is involved






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






40. Not much risk is involved






41. 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






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






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






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






45. 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






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






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






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






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






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