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






2. A lot of risk is involved






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






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






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






6. 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






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






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






9. Online research about listed companies






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






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






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






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






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






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






16. 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






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






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






19. 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






20. 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






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






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






23. 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






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






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






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






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






28. Fundamental analysis - technical analysis - efficient market theory






29. Securities exchanges - over the counter market






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






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






32. 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






33. 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






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






35. Medium amount of risk is involved






36. 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






37. Call feature - sinking fund - serial redemption






38. 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)






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






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






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






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






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






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






45. 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






46. 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






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






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






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






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