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






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






3. 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






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






5. 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






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






7. 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






8. 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






9. Online research about listed companies






10. 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






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






12. 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)






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






14. Not much risk is involved






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






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






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






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






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






20. Call feature - sinking fund - serial redemption






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






22. 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






23. Initial public offerings - investment banks






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






25. Securities exchanges - over the counter market






26. 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






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






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






29. 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






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






31. 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






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






33. Fundamental analysis - technical analysis - efficient market theory






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






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






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






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






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






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






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






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






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






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






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






46. Medium amount of risk is involved






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






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






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. 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