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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 order that an investor makes through a broker or brokerage service to buy or sell an investment immediately at the best available current price






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






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






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






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






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






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






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






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






10. 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






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






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






13. 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






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






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






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






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






18. Securities exchanges - over the counter market






19. Medium amount of risk is involved






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






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






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






23. Fundamental analysis - technical analysis - efficient market theory






24. 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






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






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






27. Initial public offerings - investment banks






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






29. Not much risk is involved






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






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






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






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






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






35. 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)






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






37. 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






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






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






40. 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






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






42. 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






43. 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






44. 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






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






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






47. 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






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






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






50. 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