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. A lot of risk is involved






2. Initial public offerings - investment banks






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






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






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






7. Online research about listed companies






8. Fundamental analysis - technical analysis - efficient market theory






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






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






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






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






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






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. 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






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






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






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






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






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






23. Not much risk is involved






24. 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






25. 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






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






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






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






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






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






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






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






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






34. 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






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






36. Medium amount of risk is involved






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






38. Call feature - sinking fund - serial redemption






39. 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






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






41. Securities exchanges - over the counter market






42. 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






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






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






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






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






47. 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)






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






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






50. 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