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






2. Medium amount of risk is involved






3. 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






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






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






6. 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






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






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






9. 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






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






11. 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






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






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






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






15. Not much risk is involved






16. Online research about listed companies






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






18. Securities exchanges - over the counter market






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






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






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






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






23. 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






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






25. A lot of risk is involved






26. 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






27. Fundamental analysis - technical analysis - efficient market theory






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






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






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






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






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






34. Initial public offerings - investment banks






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






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






37. Call feature - sinking fund - serial redemption






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






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






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






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






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






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






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






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






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






47. 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






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






49. 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)






50. 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