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






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






3. 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






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






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






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






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






8. Initial public offerings - investment banks






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






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






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






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






13. Securities exchanges - over the counter market






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






15. 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






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






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






18. A lot of risk is involved






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






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






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






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






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






24. Medium amount of risk is involved






25. 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






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






27. 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






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






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






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






31. Not much risk is involved






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






33. Fundamental analysis - technical analysis - efficient market theory






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






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






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






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






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






39. 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






40. 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






41. 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






42. 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






43. 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






44. 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)






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. Online research about listed companies






47. 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






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






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






50. 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