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






2. 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






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






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






5. Initial public offerings - investment banks






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






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






8. A lot of risk is involved






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






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






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






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






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






14. 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






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






16. Not much risk is involved






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






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






19. Securities exchanges - over the counter market






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






21. Fundamental analysis - technical analysis - efficient market theory






22. 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






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






24. Call feature - sinking fund - serial redemption






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






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






27. 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






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






29. 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






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






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






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






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






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






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






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






37. 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






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






39. 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






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






41. 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






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






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






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






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






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






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






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






49. Medium amount of risk is involved






50. Online research about listed companies