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 nationally recognized - well-established and financially sound company






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






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






4. Initial public offerings - investment banks






5. 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






6. 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






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






8. A lot of risk is involved






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






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






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






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






13. Call feature - sinking fund - serial redemption






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






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






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






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






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






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






20. 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






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






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






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






24. 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






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






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






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






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






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






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






31. 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






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. 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






34. Fundamental analysis - technical analysis - efficient market theory






35. 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






36. 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






37. 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






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






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






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






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






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






43. 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






44. 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






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






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






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






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






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






50. Medium amount of risk is involved