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






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






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






4. 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






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






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






8. 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






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






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






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






13. Online research about listed companies






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






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






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






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






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






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






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






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






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






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






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






25. 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






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






27. 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)






28. Initial public offerings - investment banks






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






30. 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






31. Call feature - sinking fund - serial redemption






32. Fundamental analysis - technical analysis - efficient market theory






33. Not much risk is involved






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






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






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






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






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






39. Securities exchanges - over the counter market






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






41. 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






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






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






44. Medium amount of risk is involved






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






46. 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






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






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






49. 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






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