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CSM Financial Management

  • Answer 50 questions in 15 minutes.
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  • Match each statement with the correct term.
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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. Stocks buy& hold - dollar cost averaging - direct investment and DRIPS

2. A lot of risk is involved

3. 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

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

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

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

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

8. 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

9. Not much risk is involved

10. 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

11. Call feature - sinking fund - serial redemption

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

13. Initial public offerings - investment banks

14. 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

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

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

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

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

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

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

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

23. 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

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

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

26. 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)

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

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

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

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

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

32. Online research about listed companies

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

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

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

36. 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

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

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

39. 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

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

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

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

43. 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

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

45. 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

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

47. 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

48. Medium amount of risk is involved

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

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