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Test your basic knowledge |
Investments
Start Test
Study First
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
Front-End Load
Total Dollar Return
Margin Account
Strike Price
2. A company that owns income producing real estate
Maintenance Margin
Hedge Fund
Initial Margin
REIT
3. Underlying asset is a real asset - typically either an agricultural product or a natural resource product
Total Market Capitalization
Variance
Commodity Futures
Hedge Fund
4. 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.
Turnover
Total Market Capitalization
Risk-Free Rate
Geometric Average Return
5. The square root of the variance
Standard Deviation
Call Money Rate
Security Selection
CDSC
6. Selection of specific securities within a particular class
Security Selection
Current Yield
Normal Distribution
Total Dollar Return
7. A sales charge levied when investors redeem shares (also called a 'back-end' load).
CDSC
Hedge Fund
Financial Futures
Asset Allocation
8. Longer-term debt obligations - often of corporations and governments - that promise to make fixed payments according to a preset schedule.
Standard Deviation
Fixed-Income Securities
Total Percent Return
Risk Premium
9. The distribution of investment funds among broad classes of assets
Capital Gains Yield
Asset Allocation
Dollar-Weighted Average Return
Option Contract
10. The average compound return earned per year over a multiyear period.
Margin Call
Geometric Average Return
Mutual Fund
Net Asset Value
11. Insurance fund convering investors' brokerage accounts with member firms
Net Asset Value
Variance
Securities Investor Protection Corporation (SIPC)
Total Market Capitalization
12. The change in stock price as a percentage of the initial stock price.
Capital Gains Yield
Hypothecation
Security Selection
Asset Allocation
13. An arrangement under which a broker is the registered owner of a security
Geometric Average Return
Street Name
Margin Account
Call Money Rate
14. Debt obligations of large corporations and governments with an original maturity of one year or less
Money Market Instuments
Effective Annual Return (EAR)
Maintenance Margin
Geometric Average Return
15. 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
Hypothecation
Put Option
Turnover
Short Sale
16. An option that gives the owner the right - but not the obligation - to sell an asset
Market Timing
Put Option
Fixed-Income Securities
Risk-Free Rate
17. The annual stock dividend as a percentage of the initial stock price
Effective Annual Return (EAR)
Turnover
Dividend Yield
Geometric Average Return
18. An investment company that stands ready to buy and sell shares at any time.
Primary Asset
Open-End Fund
Margin
Turnover
19. A symmetric - bell-shaped frequency distribution that is completely defined by its average and standard deviation.
Risk-Free Rate
Security Selection
Normal Distribution
Commodity Futures
20. The return on an investment measured as a percentage that accounts for all cash flows and capital gains or losses
Asset Allocation
NYSE Uptick Rule
Total Percent Return
Futures Contract
21. 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.
Option Contract
Normal Distribution
Derivative Asset
Arithmetic Average Return
22. 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.
Strike Price
Maintenance Margin
Variance
Option Contract
23. Average compound rate of return earned per year over a multiyear period accounting for investment inflows and outflows
Call Option
Dollar-Weighted Average Return
Total Percent Return
Fixed-Income Securities
24. The portion of the value of an investment that is not borrowed
Strike Price
Option Contract
Hypothecation
Margin
25. The minimum margin that must be supplied on a securities purchase
Net Asset Value
Short Interest
Asset Allocation
Initial Margin
26. The price you pay to buy an option
Option Premium
Turnover
Mutual Fund
CDSC
27. 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.
Mutual Fund
Geometric Average Return
Margin Call
Call Option
28. A demand for more funds that occurs when the margin in an account drops below the maintenance margin
Option Contract
Margin Call
Turnover
Maintenance Margin
29. The interest rate brokers pay to borrow bank funds for lending to customer margin accounts
Market Timing
Call Money Rate
Put Option
Variance
30. A brokerage account in which all transactions are made on a strictly cash basis
Cash Account
Open-End Fund
Derivative Asset
Capital Gains Yield
31. A sale in which the seller does not actually own the security that is sold
Dividend Yield
Turnover
12b-1 Fees
Short Sale
32. 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
Effective Annual Return (EAR)
Call Money Rate
12b-1 Fees
Total Percent Return
33. An agreement made today regarding the terms of a trade that will take place later.
Financial Futures
Closed-End Fund
Normal Distribution
Futures Contract
34. Pledging securities as collateral against a loan
Derivative Asset
Hypothecation
Risk Premium
Cash Account
35. An option that gives the owner the right - but not the obligation - to buy an asset
Standard Deviation
Call Option
Open-End Fund
Total Dollar Return
36. An investment company not accessible by the general public
Call Option
Initial Margin
Cash Account
Hedge Fund
37. A mutual fund specializing in money market instruments
Open-End Fund
Risk Premium
Money Market Mutual Fund
Mutual Fund
38. A common measure of volatility
Mutual Fund
Dividend Yield
Variance
Money Market Instuments
39. The return on an investment measured in dollars that accounts for all cash flows and capital gains or losses
Total Dollar Return
Securities Investor Protection Corporation (SIPC)
Call Option
Current Yield
40. Underlying asset is intangible - usually stocks - bonds - currencies - or money market instruments.
Financial Futures
Closed-End Fund
Open-End Fund
Short Sale
41. The rate of return on a riskless investment
Option Contract
Primary Asset
Risk-Free Rate
Normal Distribution
42. The return on an investment expressed on a per-year - or 'annualized -' basis
Effective Annual Return (EAR)
Put Option
Margin Call
Dividend Yield
43. The extra return on a risky asset over the risk-free rate; the reward for bearing risk.
Risk Premium
Risk-Free Rate
CDSC
Capital Gains Yield
44. Buying and selling in anticipation of the overall direction of a market
Total Market Capitalization
Derivative Asset
Option Premium
Market Timing
45. Annual coupon divided by the current bond price
Current Yield
Financial Futures
REIT
Initial Margin
46. The amount of common stock held in short positions
Short Interest
Effective Annual Return (EAR)
Net Asset Value
Maintenance Margin
47. 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.
Option Contract
Risk-Free Rate
Turnover
Initial Margin
48. The minimum margin that must be present at all times in a margin account
Call Money Rate
Dividend Yield
Financial Futures
Maintenance Margin
49. Rule for short sale requiring that before a short sale can be executed - the last price change must be an uptick
Call Option
Turnover
12b-1 Fees
NYSE Uptick Rule
50. An investment company with a fixed number of shares that are bought and sold only in the open stock market.
Short Sale
Closed-End Fund
Net Asset Value
Dividend Yield