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






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






3. 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






4. 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






5. 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






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






7. Securities exchanges - over the counter market






8. Fundamental analysis - technical analysis - efficient market theory






9. 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






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






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






12. 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






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






14. A lot of risk is involved






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






16. 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






17. Medium amount of risk is involved






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






19. Call feature - sinking fund - serial redemption






20. Initial public offerings - investment banks






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






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






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






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






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






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






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






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






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






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






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






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






33. 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






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






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






36. 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






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






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






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






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






41. 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)






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






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






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






45. 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






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






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






48. Not much risk is involved






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






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