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






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






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






4. 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






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






6. Securities exchanges - over the counter market






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






8. Medium amount of risk is involved






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






10. 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






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






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






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






14. Online research about listed companies






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






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






17. Not much risk is involved






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






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






20. 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)






21. 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






22. 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






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






24. 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






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






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






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






28. 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






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






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






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






32. 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






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






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






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






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






37. Call feature - sinking fund - serial redemption






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






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. 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






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






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






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






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






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






47. Fundamental analysis - technical analysis - efficient market theory






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






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






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