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






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






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






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






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






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. 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






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






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






10. 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






11. 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






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






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






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






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






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






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






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






19. 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






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






21. 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






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






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






24. Online research about listed companies






25. Securities exchanges - over the counter market






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






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






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






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






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






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






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






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






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. Medium amount of risk is involved






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






37. 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






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






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






40. A lot of risk is involved






41. 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






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






43. Not much risk is involved






44. Call feature - sinking fund - serial redemption






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






46. 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






47. 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






48. 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






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






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