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






2. Initial public offerings - investment banks






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






4. A lot of risk is involved






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






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






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






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






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






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






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. 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






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






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






15. Online research about listed companies






16. 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






17. 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






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






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






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






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






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






23. 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






24. Fundamental analysis - technical analysis - efficient market theory






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






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






27. Call feature - sinking fund - serial redemption






28. 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






29. 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






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






31. 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






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






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






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






36. 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






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






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






39. 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






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






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






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






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






44. Securities exchanges - over the counter market






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






46. Medium amount of risk is involved






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






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






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






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