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






2. A lot of risk is involved






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






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






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






6. 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






7. 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






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






9. Medium amount of risk is involved






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






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






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






13. Not much risk is involved






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






15. 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






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






17. 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)






18. 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






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






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






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






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






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






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






25. 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






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






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






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






29. Initial public offerings - investment banks






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






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






32. 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






33. Fundamental analysis - technical analysis - efficient market theory






34. Securities exchanges - over the counter market






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






36. 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






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






38. 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






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






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






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






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






43. Call feature - sinking fund - serial redemption






44. 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






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






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






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






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






49. 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






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