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. 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






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






3. Fundamental analysis - technical analysis - efficient market theory






4. Not much risk is involved






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






6. 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)






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






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






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






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






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






12. Securities exchanges - over the counter market






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






14. Call feature - sinking fund - serial redemption






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






16. 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






17. 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






18. 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






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






20. 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






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






22. 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






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






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






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






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






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






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






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






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






31. A lot of risk is involved






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






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






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






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






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






37. 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






38. Medium amount of risk is involved






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






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






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






42. 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






43. 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






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






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






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






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






48. Initial public offerings - investment banks






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






50. 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