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CSM Financial Management

  • Answer 50 questions in 15 minutes.
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  • 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. Illiquidity - declining property values - lack of diversification - long depreciation period - management problems - syndicate investment is not a tax shelter

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

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

4. 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

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. Call feature - sinking fund - serial redemption

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

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

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

10. 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

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

12. 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

13. Securities exchanges - over the counter market

14. 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

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

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

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. 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

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

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

22. Initial public offerings - investment banks

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

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

25. A lot of risk is involved

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

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

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

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

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

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

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

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

34. 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

35. Online research about listed companies

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

37. 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

38. 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

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

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

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

42. 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

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

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

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

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

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

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

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

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