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. 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






2. 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






3. 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






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






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






6. 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






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






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






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






10. 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






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






12. 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






13. 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






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






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






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






17. A lot of risk is involved






18. Not much risk is involved






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






20. 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






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






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






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






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






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






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






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






29. 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






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






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






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






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






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






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






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






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






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






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






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






41. Securities exchanges - over the counter market






42. Initial public offerings - investment banks






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






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






45. Medium amount of risk is involved






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






47. Online research about listed companies






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






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






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