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 on purchases of shares in some mutual funds






2. Pledging securities as collateral against a loan






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






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






5. A sale in which the seller does not actually own the security that is sold






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






7. The price you pay to buy an option






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






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






10. Selection of specific securities within a particular class






11. 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.






12. The rate of return on a riskless investment






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






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






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






16. An investment company not accessible by the general public






17. The amount of common stock held in short positions






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






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






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






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






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






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






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






25. A mutual fund specializing in money market instruments






26. 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.






27. A company that owns income producing real estate






28. Longer-term debt obligations - often of corporations and governments - that promise to make fixed payments according to a preset schedule.






29. The average compound return earned per year over a multiyear period.






30. 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






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






32. A sales charge levied when investors redeem shares (also called a 'back-end' load).






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






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






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






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






37. The square root of the variance






38. 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.






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






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






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






42. Annual coupon divided by the current bond price






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






44. A common measure of volatility






45. 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.






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






47. 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.






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






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






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