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. An investment company not accessible by the general public






3. A mutual fund specializing in money market instruments






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






5. The amount of common stock held in short positions






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






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






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






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






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






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






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






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






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






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






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






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






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






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






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






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






22. The square root of the variance






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






24. 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.






25. 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






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






27. A common measure of volatility






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






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






30. The rate of return on a riskless investment






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






32. Annual coupon divided by the current bond price






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






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






35. A company that owns income producing real estate






36. Pledging securities as collateral against a loan






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






38. 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






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






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






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






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






43. A sales charge levied on purchases of shares in some mutual funds






44. The price you pay to buy an option






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






46. 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.






47. 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.






48. 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.






49. 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.






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