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






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






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






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






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






6. Fundamental analysis - technical analysis - efficient market theory






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






8. 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






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






10. Initial public offerings - investment banks






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






12. 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






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






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






15. 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)






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






17. 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






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






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






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






21. 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






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






23. A lot of risk is involved






24. 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






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






26. 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






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






28. Not much risk is involved






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






30. 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






31. Securities exchanges - over the counter market






32. 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






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






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






35. 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






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






37. Medium amount of risk is involved






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






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






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






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






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






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






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






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






46. Call feature - sinking fund - serial redemption






47. 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






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






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






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