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






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






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






4. 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






5. 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






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






7. Online research about listed companies






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






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






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






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






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






13. 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






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






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






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






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






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






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






20. 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






21. 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






22. Not much risk is involved






23. Securities exchanges - over the counter market






24. 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






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






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






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






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






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






30. 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






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






32. 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






33. 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






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






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






36. Fundamental analysis - technical analysis - efficient market theory






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






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






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






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






41. Call feature - sinking fund - serial redemption






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






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






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






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






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






47. 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






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






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






50. A lot of risk is involved