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






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






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






4. 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






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






6. Online research about listed companies






7. 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






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






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






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






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






12. 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






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






14. 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






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






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






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. 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






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






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






21. 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






22. 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






23. A lot of risk is involved






24. Medium amount of risk is involved






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






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






27. Securities exchanges - over the counter market






28. 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






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






30. 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






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






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






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






34. Not much risk is involved






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






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






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






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






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






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






41. 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






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






43. 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






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






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






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






47. Call feature - sinking fund - serial redemption






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






49. 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)






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