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






2. Initial public offerings - investment banks






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






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






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






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






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






8. 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






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






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






11. Medium amount of risk is involved






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






13. A lot of risk is involved






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






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






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






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






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






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






20. 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






21. 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






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






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






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






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






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






28. 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






29. 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)






30. Not much risk is involved






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






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






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






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






35. 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






36. 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






37. 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






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






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






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






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






43. 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






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






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






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






47. Securities exchanges - over the counter market






48. 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






49. Fundamental analysis - technical analysis - efficient market theory






50. Call feature - sinking fund - serial redemption