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






2. 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






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






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






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






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






7. 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)






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






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






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






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






12. 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






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






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






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






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. 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






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






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






21. 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






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






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






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






25. Online research about listed companies






26. 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






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






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






29. Call feature - sinking fund - serial redemption






30. 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






31. A lot of risk is involved






32. Fundamental analysis - technical analysis - efficient market theory






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






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






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






36. Securities exchanges - over the counter market






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






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






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






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






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






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. 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






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






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






46. Medium amount of risk is involved






47. 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






48. 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






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






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







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