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. 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






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






3. 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






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






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






6. 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)






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






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






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






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






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






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






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






14. 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






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






16. 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






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






18. Fundamental analysis - technical analysis - efficient market theory






19. 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






20. Online research about listed companies






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






22. Securities exchanges - over the counter market






23. Medium amount of risk is involved






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






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






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






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






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






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






30. 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






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






32. 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






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






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






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






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






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






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






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






40. 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






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






42. 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






43. Not much risk is involved






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






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






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






47. 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






48. A lot of risk is involved






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






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