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






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






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






4. 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






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






6. 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






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






8. 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






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






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






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






12. Online research about listed companies






13. 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






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






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






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






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






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






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






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






21. 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






22. Securities exchanges - over the counter market






23. 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






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






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






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






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






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






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






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






31. 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






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






33. Medium amount of risk is involved






34. Initial public offerings - investment banks






35. 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






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






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






38. Not much risk is involved






39. 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






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






41. A lot of risk is involved






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






43. 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)






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






45. 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






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






47. Call feature - sinking fund - serial redemption






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






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






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