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






2. 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






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






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






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






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






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






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






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






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






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






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






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






14. 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






15. 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






16. Not much risk is involved






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






19. 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






20. Online research about listed companies






21. 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






22. Securities exchanges - over the counter market






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






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






25. 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






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






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






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






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






30. 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)






31. 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






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






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






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. 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






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






37. A lot of risk is involved






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






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






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






41. Fundamental analysis - technical analysis - efficient market theory






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






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






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






45. 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






46. Medium amount of risk is involved






47. Call feature - sinking fund - serial redemption






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






49. 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






50. 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