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

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

3. 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

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

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

6. Not much risk is involved

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

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

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

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

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

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

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

14. 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

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. 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

17. 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

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

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

20. 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)

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

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

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

24. 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

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

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

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

28. A lot of risk is involved

29. Securities exchanges - over the counter market

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

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

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

33. Online research about listed companies

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

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

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. Medium amount of risk is involved

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

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

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

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

42. 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

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

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

45. 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

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

47. Initial public offerings - investment banks

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

49. Fundamental analysis - technical analysis - efficient market theory

50. Call feature - sinking fund - serial redemption