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. Medium amount of risk is involved






2. 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)






3. 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






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






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






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






7. 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






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






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






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






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






12. 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






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






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






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






16. Not much risk is involved






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






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






19. Securities exchanges - over the counter market






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






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






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






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






24. A lot of risk is involved






25. 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






26. 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






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






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






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






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






31. 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






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






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






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






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






36. 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






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






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






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






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






41. 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






42. 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






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






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






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






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






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






48. Initial public offerings - investment banks






49. Online research about listed companies






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