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. Initial public offerings - investment banks






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






3. 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






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






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






6. 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)






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






8. Fundamental analysis - technical analysis - efficient market theory






9. 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






10. Not much risk is involved






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






12. 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






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






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






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






16. 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






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






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






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






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






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






22. 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






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






24. 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






25. 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






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






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






28. Online research about listed companies






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






30. A lot of risk is involved






31. Securities exchanges - over the counter market






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






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






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






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






36. Medium amount of risk is involved






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






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






39. 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






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






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






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






43. 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






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






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






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






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






48. 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






49. Call feature - sinking fund - serial redemption






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