Test your basic knowledge |

Investments

Subject : personal-finance
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 sales charge levied when investors redeem shares (also called a 'back-end' load).






2. The portion of the value of an investment that is not borrowed






3. The return on an investment expressed on a per-year - or 'annualized -' basis






4. An option that gives the owner the right - but not the obligation - to buy an asset






5. A financial asset that is derived from an existing traded asset rather than issued by a business or government to raise capital. More generally - any financial asset that is not a primary asset.






6. The distribution of investment funds among broad classes of assets






7. A demand for more funds that occurs when the margin in an account drops below the maintenance margin






8. Rule for short sale requiring that before a short sale can be executed - the last price change must be an uptick






9. Insurance fund convering investors' brokerage accounts with member firms






10. A common measure of volatility






11. Average compound rate of return earned per year over a multiyear period accounting for investment inflows and outflows






12. The return earned in an average year over a multiyear period






13. The change in stock price as a percentage of the initial stock price.






14. Underlying asset is a real asset - typically either an agricultural product or a natural resource product






15. An investment company that stands ready to buy and sell shares at any time.






16. A brokerage account in which all transactions are made on a strictly cash basis






17. The interest rate brokers pay to borrow bank funds for lending to customer margin accounts






18. Named for SEC rule 12b-1 - which allows funds to spend up to 1 percent of fund assets annually to cover distribution and marketing costs






19. Buying and selling in anticipation of the overall direction of a market






20. Security originally sold by a business or government to raise money






21. An agreement that gives the owner the right - but not the obligation - to buy or sell a specific asset at a specified price for a set period of time.






22. The extra return on a risky asset over the risk-free rate; the reward for bearing risk.






23. The minimum margin that must be supplied on a securities purchase






24. An option that gives the owner the right - but not the obligation - to sell an asset






25. The price specified in an option contract at which the underlying asset can be bought (for a call option) or sold (for a put option). Also called the striking price or exercise price.






26. An agreement made today regarding the terms of a trade that will take place later.






27. The return on an investment measured in dollars that accounts for all cash flows and capital gains or losses






28. A mutual fund specializing in money market instruments






29. A symmetric - bell-shaped frequency distribution that is completely defined by its average and standard deviation.






30. A measure of how much trading a fund does - calculated as the lesser of total purchases or sales during a year divided by average daily assets






31. Selection of specific securities within a particular class






32. The annual stock dividend as a percentage of the initial stock price






33. The rate of return on a riskless investment






34. An investment company with a fixed number of shares that are bought and sold only in the open stock market.






35. The return on an investment measured as a percentage that accounts for all cash flows and capital gains or losses






36. Pledging securities as collateral against a loan






37. The amount of common stock held in short positions






38. The minimum margin that must be present at all times in a margin account






39. Debt obligations of large corporations and governments with an original maturity of one year or less






40. The price you pay to buy an option






41. Or market cap for short is equal to its stock price multiplied by the number of shares of stock. It's the total value of the company's stock.






42. An arrangement under which a broker is the registered owner of a security






43. The square root of the variance






44. A brokerage account in which - subject to limits - securities can be bought an sold on credit






45. A company that owns income producing real estate






46. An investment company not accessible by the general public






47. Annual coupon divided by the current bond price






48. Simply a means of combining or pooling the funds of a large group of investors. The buy and sell decisions for the resulting pool are then made by a fund manager - who is compensated for the service provided.






49. Underlying asset is intangible - usually stocks - bonds - currencies - or money market instruments.






50. The value of assets less liabilities held by a mutual fund - divided by the number of shares outstanding.