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 portion of the value of an investment that is not borrowed






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






3. A common measure of volatility






4. 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






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






6. 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






7. The amount of common stock held in short positions






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






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






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






11. Annual coupon divided by the current bond price






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






13. The rate of return on a riskless investment






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






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






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






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






18. The price you pay to buy an option






19. An investment company not accessible by the general public






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






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






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






23. 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.






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






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






26. Pledging securities as collateral against a loan






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






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






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






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






31. 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.






32. 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.






33. A company that owns income producing real estate






34. 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.






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






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






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






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






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






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






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






42. 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.






43. The square root of the variance






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






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






46. Selection of specific securities within a particular class






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






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






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






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