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. 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.






2. 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






3. The square root of the variance






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






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






6. The rate of return on a riskless investment






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






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






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






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






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






12. The price you pay to buy an option






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






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






15. A common measure of volatility






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






17. 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.






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






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






20. 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.






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






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






23. A company that owns income producing real estate






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






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






26. The amount of common stock held in short positions






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






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






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






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






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






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






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






34. Selection of specific securities within a particular class






35. 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.






36. A mutual fund specializing in money market instruments






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






38. 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.






39. Annual coupon divided by the current bond price






40. Pledging securities as collateral against a loan






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






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






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






44. An investment company not accessible by the general public






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






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






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






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






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