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






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






3. 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






4. 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






5. 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)






6. 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






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






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






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






10. 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






11. 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






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






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






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






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






16. 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






17. Medium amount of risk is involved






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






19. Online research about listed companies






20. 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






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






22. Call feature - sinking fund - serial redemption






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






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






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






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






27. 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






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






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






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






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






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






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






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






35. A lot of risk is involved






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






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






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






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






40. Not much risk is involved






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






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






43. 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






44. Initial public offerings - investment banks






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






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






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






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






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






50. Fundamental analysis - technical analysis - efficient market theory