Test your basic knowledge |

CSM Financial Management

  • 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. 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

2. 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

3. A lot of risk is involved

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

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

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

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

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

9. 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

10. 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)

11. 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

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

13. Medium amount of risk is involved

14. Fundamental analysis - technical analysis - efficient market theory

15. 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

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

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

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

19. Not much risk is involved

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

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

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

23. 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

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

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

26. 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

27. Online research about listed companies

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

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

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

32. Call feature - sinking fund - serial redemption

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

34. 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

35. 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

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

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

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

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

40. Initial public offerings - investment banks

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

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

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

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

45. 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

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

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

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

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