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






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






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






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






5. 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






6. 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






7. 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






8. 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






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






10. Online research about listed companies






11. 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






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






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






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






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






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






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






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






19. 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






20. Initial public offerings - investment banks






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






22. 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






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






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






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






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






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






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






29. 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






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






31. A lot of risk is involved






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






33. 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






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






35. 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






36. 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






37. Fundamental analysis - technical analysis - efficient market theory






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






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






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






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






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






43. Call feature - sinking fund - serial redemption






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






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






46. 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






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






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






50. Medium amount of risk is involved