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 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






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






3. 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






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






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






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






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






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






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






10. 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)






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






12. Initial public offerings - investment banks






13. Online research about listed companies






14. 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






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






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






17. 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






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






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






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






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






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






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






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






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






26. Securities exchanges - over the counter market






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






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






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






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






31. 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






32. 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






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






34. 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






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






36. 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






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






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






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






40. A lot of risk is involved






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






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






44. Fundamental analysis - technical analysis - efficient market theory






45. Call feature - sinking fund - serial redemption






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






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






48. 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






49. Not much risk is involved






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