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. 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






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






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






5. 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






6. Online research about listed companies






7. 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






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






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






10. 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






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






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






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






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






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






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






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






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






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






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






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






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






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






25. 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






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






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






28. Not much risk is involved






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






30. Call feature - sinking fund - serial redemption






31. Fundamental analysis - technical analysis - efficient market theory






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






33. Securities exchanges - over the counter market






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






35. 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






36. 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)






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






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






39. 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






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






42. 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






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






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






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






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






47. 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






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






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






50. A lot of risk is involved