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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. Medium amount of risk is involved

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

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

4. 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

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

6. 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

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

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

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

10. 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

11. 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

12. Fundamental analysis - technical analysis - efficient market theory

13. 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

14. 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)

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. 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

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

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

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

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

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

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

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

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

25. 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

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

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

28. 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

29. 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

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

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

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

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

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

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

36. Initial public offerings - investment banks

37. Online research about listed companies

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

39. Not much risk is involved

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

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

42. A lot of risk is involved

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

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

45. 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

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

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

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

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