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






2. Not much risk is involved






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






4. Initial public offerings - investment banks






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






6. 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






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






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






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






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. 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






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






13. 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






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






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






16. 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






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






18. 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






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






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






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






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






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






24. 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)






25. 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






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






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






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






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






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






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






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






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






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






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






37. 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






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






39. 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






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






41. 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






42. 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






43. Online research about listed companies






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






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






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






47. 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






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






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






50. Fundamental analysis - technical analysis - efficient market theory