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






2. 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






3. 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






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






5. A lot of risk is involved






6. Medium amount of risk is involved






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






8. 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






9. Not much risk is involved






10. Securities exchanges - over the counter market






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






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






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






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






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






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






18. 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






19. Online research about listed companies






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






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






22. 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






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






24. Call feature - sinking fund - serial redemption






25. Fundamental analysis - technical analysis - efficient market theory






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






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






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






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






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






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






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






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






34. 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)






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






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






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






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






39. 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






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






41. Initial public offerings - investment banks






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






43. 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






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






45. 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






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






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






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






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






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