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CSM Financial Management

  • Answer 50 questions in 15 minutes.
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  • Match each statement with the correct term.
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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. Securities exchanges - over the counter market

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

3. 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

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

5. 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

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

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

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

9. 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

10. 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

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

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

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

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

15. 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

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

17. 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

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

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

20. 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

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

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

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. Medium amount of risk is involved

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

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

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

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

29. Online research about listed companies

30. A lot of risk is involved

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

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

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

34. Initial public offerings - investment banks

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

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

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

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. 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)

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

42. 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

43. Fundamental analysis - technical analysis - efficient market theory

44. Call feature - sinking fund - serial redemption

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

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

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

48. 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

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

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