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






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






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






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






5. 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






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






7. 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






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






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






10. 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






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






12. Online research about listed companies






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






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






15. Call feature - sinking fund - serial redemption






16. 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






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






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






19. 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






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






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






22. 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






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






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






25. 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






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






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






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






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






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






31. Securities exchanges - over the counter market






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






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






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






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






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






37. 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)






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






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






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






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






42. Not much risk is involved






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






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






45. 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






46. Initial public offerings - investment banks






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






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






49. 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






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