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

2. Initial public offerings - investment banks

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

4. A lot of risk is involved

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

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

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

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

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

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

11. 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

12. 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

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

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

15. Online research about listed companies

16. 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

17. 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

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

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

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

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

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

23. 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

24. Fundamental analysis - technical analysis - efficient market theory

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

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

27. Call feature - sinking fund - serial redemption

28. 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

29. 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

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

31. 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

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

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

34. 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

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

36. 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

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

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

39. 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

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

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

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

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

44. Securities exchanges - over the counter market

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

46. Medium amount of risk is involved

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

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

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

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