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






2. 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






3. 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






4. 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






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






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






7. 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






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






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






10. 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






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






12. 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






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






14. 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)






15. 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






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






17. 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






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






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






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






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






23. 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






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






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






26. Securities exchanges - over the counter market






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






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






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






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






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






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






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






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






35. Initial public offerings - investment banks






36. Call feature - sinking fund - serial redemption






37. 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






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






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






40. 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






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






42. Online research about listed companies






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






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






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






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






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






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






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






50. Fundamental analysis - technical analysis - efficient market theory