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. 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






2. 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)






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






4. 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






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






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






7. 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






8. 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






9. Initial public offerings - investment banks






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






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






12. 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






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






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






15. 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






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






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






18. A lot of risk is involved






19. Call feature - sinking fund - serial redemption






20. Online research about listed companies






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






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






23. 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






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






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






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






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






28. 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






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






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






31. 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






32. Securities exchanges - over the counter market






33. Medium amount of risk is involved






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






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






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






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






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






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






41. 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






42. 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






43. 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






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






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






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






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






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






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






50. Fundamental analysis - technical analysis - efficient market theory