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






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






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






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. 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






6. 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






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






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






10. Medium amount of risk is involved






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






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






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






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






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






16. A lot of risk is involved






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






18. 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






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






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






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






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






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






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






25. 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






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






27. Not much risk is involved






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






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






30. Securities exchanges - over the counter market






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






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






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






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






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






36. Fundamental analysis - technical analysis - efficient market theory






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






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






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






40. 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






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






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






43. 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






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






45. Call feature - sinking fund - serial redemption






46. 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






47. 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)






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






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






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