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






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






3. Online research about listed companies






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






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






6. Fundamental analysis - technical analysis - efficient market theory






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






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






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






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






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






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






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






14. Not much risk is involved






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






16. 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






17. 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






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






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






20. Securities exchanges - over the counter market






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






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






23. 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






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






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






26. 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






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






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






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






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






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






32. 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






33. Medium amount of risk is involved






34. 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






35. 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






36. 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)






37. Initial public offerings - investment banks






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






39. 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






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






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






42. 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






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






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






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






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






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






48. 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






49. 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






50. A lot of risk is involved