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 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






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






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






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






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






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






7. Not much risk is involved






8. 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






9. Medium amount of risk is involved






10. 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






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






12. 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






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






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






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






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






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






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






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






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






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






22. A lot of risk is involved






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






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






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






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






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






28. Fundamental analysis - technical analysis - efficient market theory






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






30. Online research about listed companies






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






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






33. 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






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






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






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






37. 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






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






39. 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






40. Call feature - sinking fund - serial redemption






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






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






43. 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






44. 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






45. 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)






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






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






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






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






50. 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