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. Fundamental analysis - technical analysis - efficient market theory






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






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






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






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






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






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






10. 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






11. Medium amount of risk is involved






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






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






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






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






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






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






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






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






21. 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






22. A lot of risk is involved






23. 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






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






25. 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






26. 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






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






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






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






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






31. Online research about listed companies






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






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






34. 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






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






36. Initial public offerings - investment banks






37. 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






38. Securities exchanges - over the counter market






39. Call feature - sinking fund - serial redemption






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






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






42. 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






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






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






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






46. 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






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






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






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






50. 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