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






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






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






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






5. 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






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






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






9. Call feature - sinking fund - serial redemption






10. Securities exchanges - over the counter market






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






12. 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






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






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






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






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






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






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






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






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






21. 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






22. 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






23. 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






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






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






26. A lot of risk is involved






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






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






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






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






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






32. 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






33. Initial public offerings - investment banks






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






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






36. 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)






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






38. 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






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






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






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






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






43. 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






44. 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






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






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






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






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






49. Medium amount of risk is involved






50. Not much risk is involved