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






2. A lot of risk is involved






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






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






5. 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






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






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






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






9. 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






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






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






12. 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






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






14. Fundamental analysis - technical analysis - efficient market theory






15. Online research about listed companies






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






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






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






19. Securities exchanges - over the counter market






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






21. 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






22. 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






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. Initial public offerings - investment banks






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






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






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






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






30. 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






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






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. 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






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






35. 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






36. 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)






37. Not much risk is involved






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






39. Call feature - sinking fund - serial redemption






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






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






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






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






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






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






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






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






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






49. Medium amount of risk is involved






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