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






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






3. A lot of risk is involved






4. 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






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






6. Initial public offerings - investment banks






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






8. Not much risk is involved






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






10. Call feature - sinking fund - serial redemption






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






12. 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)






13. 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






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






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






16. 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






17. Securities exchanges - over the counter market






18. 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






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. 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






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






22. Online research about listed companies






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






24. 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






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






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






27. 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






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






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






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






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






32. 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






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






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






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






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






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






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






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






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






41. Medium amount of risk is involved






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






43. 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






44. 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






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






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






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






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






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






50. Fundamental analysis - technical analysis - efficient market theory