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






2. Not much risk is involved






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






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






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






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






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






8. Online research about listed companies






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






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






11. 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)






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






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






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






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






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






17. 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






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






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






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






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






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






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






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






25. Medium amount of risk is involved






26. Initial public offerings - investment banks






27. Securities exchanges - over the counter market






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






29. A lot of risk is involved






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






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. 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






33. Fundamental analysis - technical analysis - efficient market theory






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






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






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






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






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






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






40. 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






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






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






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






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






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






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






47. 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






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






49. 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






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