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






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






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






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






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






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






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






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






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






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






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






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






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






15. 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






16. 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






17. Call feature - sinking fund - serial redemption






18. Online research about listed companies






19. 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






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






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






22. 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






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






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






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






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






27. 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






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






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






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






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






33. A lot of risk is involved






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






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






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






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






38. 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






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






40. Securities exchanges - over the counter market






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






42. 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






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






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






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






46. Initial public offerings - investment banks






47. 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






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






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






50. 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