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. The amount of common stock held in short positions






2. A mutual fund specializing in money market instruments






3. The price you pay to buy an option






4. A common measure of volatility






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






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






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






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






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






10. 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.






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






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






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






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






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






16. An investment company not accessible by the general public






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






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






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






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






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






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






23. Pledging securities as collateral against a loan






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






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






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






27. The rate of return on a riskless investment






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






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






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






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






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






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






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






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






36. 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.






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






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






39. 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.






40. 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






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






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






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






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






45. 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






46. The square root of the variance






47. Selection of specific securities within a particular class






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






49. A company that owns income producing real estate






50. Annual coupon divided by the current bond price







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