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. 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






2. Medium amount of risk is involved






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






4. 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






5. 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






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






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






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






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






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






11. 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






12. 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)






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






14. Call feature - sinking fund - serial redemption






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






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






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






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






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






20. 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






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






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. 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






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






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






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






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






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






29. 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






30. 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






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






32. 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






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






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






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






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






37. Online research about listed companies






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






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






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






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






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






43. Initial public offerings - investment banks






44. A lot of risk is involved






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






46. 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






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






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






49. 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






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