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. 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






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






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






4. 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






5. A lot of risk is involved






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






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






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






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






10. 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






11. Call feature - sinking fund - serial redemption






12. 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






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






14. Online research about listed companies






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






16. 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






17. 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






18. 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






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






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






21. 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






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






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






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






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






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






27. 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)






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






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






30. Fundamental analysis - technical analysis - efficient market theory






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






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






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






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






35. 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






36. 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






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






38. 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






39. Medium amount of risk is involved






40. Initial public offerings - investment banks






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






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






43. 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






44. Not much risk is involved






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






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






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






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






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






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