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






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






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






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






5. 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






6. Call feature - sinking fund - serial redemption






7. 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






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






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






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






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






12. Initial public offerings - investment banks






13. Online research about listed companies






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






15. 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






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






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






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






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






20. 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






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






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






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






24. 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)






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






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






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






28. 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






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






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






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






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






33. 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






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






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






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






37. 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






38. 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






39. Fundamental analysis - technical analysis - efficient market theory






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






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






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






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






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






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






46. 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






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






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






49. Securities exchanges - over the counter market






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