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. 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






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






3. 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






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






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






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






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






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






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






10. Medium amount of risk is involved






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






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






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






14. Initial public offerings - investment banks






15. 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






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






17. 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






18. A lot of risk is involved






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






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






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






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






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






24. 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






25. 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)






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






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






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






29. Fundamental analysis - technical analysis - efficient market theory






30. 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






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






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






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






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






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






36. 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






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






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






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






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






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






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






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






44. 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






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






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






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






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






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






50. 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