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






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






3. 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






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






5. 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






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






7. Call feature - sinking fund - serial redemption






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






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






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






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






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






13. Not much risk is involved






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






15. A lot of risk is involved






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






17. 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






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






19. 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






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






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






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






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






24. Securities exchanges - over the counter market






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






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






27. 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)






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






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






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






31. 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






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






33. Initial public offerings - investment banks






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






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






36. 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






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






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






39. 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






40. Online research about listed companies






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






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






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






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






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






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






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






48. 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






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






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







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