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






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






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






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






5. 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






6. 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






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






8. 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






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






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






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






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






13. Call feature - sinking fund - serial redemption






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






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






17. Not much risk is involved






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






19. Initial public offerings - investment banks






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






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






22. Fundamental analysis - technical analysis - efficient market theory






23. 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)






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






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






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






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






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






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






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






31. 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






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






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






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






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






36. Online research about listed companies






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






38. 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






39. 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






40. Securities exchanges - over the counter market






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






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






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






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






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






46. 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






47. Medium amount of risk is involved






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






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






50. A lot of risk is involved