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CSM Financial Management

  • Answer 50 questions in 15 minutes.
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  • Match each statement with the correct term.
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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. Call feature - sinking fund - serial redemption

2. Securities exchanges - over the counter market

3. 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)

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

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

6. 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

7. 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

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

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

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

11. 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

12. 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

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

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

15. Initial public offerings - investment banks

16. 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

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

18. Online research about listed companies

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

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

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

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

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

24. Fundamental analysis - technical analysis - efficient market theory

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

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

27. A lot of risk is involved

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

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

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

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

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

33. Not much risk is involved

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

35. 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

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

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

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

39. 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

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

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

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

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

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

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

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

47. 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

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

49. 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

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