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. 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






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






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






4. Call feature - sinking fund - serial redemption






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






6. 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






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






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






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






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 that an investor makes through a broker or brokerage service to buy or sell an investment immediately at the best available current price






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






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






14. 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






15. Initial public offerings - investment banks






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






17. 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






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






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






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






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






22. 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






23. 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)






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






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






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






27. 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






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






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






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






31. 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






32. Fundamental analysis - technical analysis - efficient market theory






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






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






35. 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






36. Not much risk is involved






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






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






39. 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






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






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






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






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






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






45. 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






46. Medium amount of risk is involved






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






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






49. Securities exchanges - over the counter market






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