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






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






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






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






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






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






7. A lot of risk is involved






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






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






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






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






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






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






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






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






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






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






18. 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)






19. 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






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






21. 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






22. 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






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






24. Initial public offerings - investment banks






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






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






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






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






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






30. 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






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






32. Not much risk is involved






33. Call feature - sinking fund - serial redemption






34. 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






35. 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






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






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






38. Online research about listed companies






39. 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






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






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






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






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






44. 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






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






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






47. Medium amount of risk is involved






48. 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






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






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