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






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






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






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






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






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






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






8. 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






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






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






11. 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






12. 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






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






14. Call feature - sinking fund - serial redemption






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






16. Online research about listed companies






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






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






19. 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)






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






21. Fundamental analysis - technical analysis - efficient market theory






22. 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






23. 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






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






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






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






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






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






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






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






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






33. Not much risk is involved






34. 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






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






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






37. Initial public offerings - investment banks






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






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. 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






41. 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






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






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






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






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






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






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






48. A lot of risk is involved






49. Securities exchanges - over the counter market






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