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






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






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






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






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






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






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






8. The price you pay to buy an option






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






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






11. A common measure of volatility






12. 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.






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






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






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






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






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






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






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






20. Selection of specific securities within a particular class






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






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






23. A company that owns income producing real estate






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






25. 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.






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






27. The rate of return on a riskless investment






28. Annual coupon divided by the current bond price






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






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






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






32. A mutual fund specializing in money market instruments






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






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






35. The amount of common stock held in short positions






36. 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






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






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






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






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






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






42. Pledging securities as collateral against a loan






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






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






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






46. 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.






47. An investment company not accessible by the general public






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






49. The square root of the variance






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