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. 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






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






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






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






5. 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






6. Medium amount of risk is involved






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






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






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






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






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






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






13. 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)






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






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






16. Not much risk is involved






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






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






19. Securities exchanges - over the counter market






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






21. 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






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






23. 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






24. 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






25. 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






26. 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






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






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






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






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






31. 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






32. Online research about listed companies






33. Call feature - sinking fund - serial redemption






34. A lot of risk is involved






35. 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






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






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






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






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






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






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






42. 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






43. Initial public offerings - investment banks






44. 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






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






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






47. Fundamental analysis - technical analysis - efficient market theory






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






49. 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






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