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






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






3. A lot of risk is involved






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






5. Securities exchanges - over the counter market






6. 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






7. 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






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






9. Initial public offerings - investment banks






10. 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






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






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






13. 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






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






17. Not much risk is involved






18. 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






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






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






21. Online research about listed companies






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






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






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






25. 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)






26. Call feature - sinking fund - serial redemption






27. 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






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






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






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






31. 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






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






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






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






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






37. 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






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






39. 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






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






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






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






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






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






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






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






47. 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






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






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






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