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






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






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






4. 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






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






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






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






8. 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






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






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






11. 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)






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






13. 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






14. 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






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






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






17. 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






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






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






20. 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






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






22. Fundamental analysis - technical analysis - efficient market theory






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






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






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






26. 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






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






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






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






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






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






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






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






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






35. Not much risk is involved






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






37. Online research about listed companies






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






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






40. Call feature - sinking fund - serial redemption






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






42. A lot of risk is involved






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






44. Securities exchanges - over the counter market






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






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






47. 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






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






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