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CFA Level2 Vocab

Subjects : certifications, cfa
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 expected value of a stated event given that another event has occurred.






2. Any rate used in finding the present value of a future cash flow.






3. Orders to buy or sell that are too large for the liquidity ordinarily available in dealer networks or stock exchanges.






4. The elimination or phasing out of reg-ulations on economic activity.






5. Activities that are part of the day-to-day business functioning of an entity - such as selling inven tory and providing services.






6. The process by which options and other derivatives are priced by treating investors as though they were risk neutral.






7. The revaluation of a financial asset or liability to its current market value or fair value.






8. A test that is not concerned with a parameter - or that makes minimal assumptions about the population from which a sam Ie comes.






9. A conventional cash flow pattern is one with an ini tial outflow followed by a series of in ows.






10. An increment or premium to value associated with a controlling ownership interest in a company.






11. A balance sheet liability that arises when a deficit amount is paid for income taxes relative to accounting profit. The taxable income is less than the accounting profit and income tax payable is less than tax expense. The company expects to eliminat






12. CMT swap A swap in which the floating rate is the rate on a security known as a constant maturity treasury or CMT security.






13. Projects in which influential managers want the corporation to invest. Often - unfortu-nately - pet projects are selected without undergo-ing normal capital budgeting analysis.






14. Method of valu-ing property based on recen t sales prices of simi-lar properties.






15. Private equity investors in development-stage companies.






16. A measure of sensitivity; the incremental change in one variable with respect to an incre-mental change in another variable.






17. The company in a merger or acquisition that is acquiring the target.






18. A company that has similar business risk; usually in the same industry and preferably with a single line of business.






19. With eference to grouped data - a se t or val-ues within w ich an observation falls.






20. A method of estimating VAR that uses data from the returns of the portfolio over a recent past period and compiles this data in the form of a histogram.






21. An interest rate swap in which one party pays a fixed rate and the other pays a float-ing rate - with both sets of payments in the same currency.






22. The preference some investors have for shares that exhibit certain characteristics.






23. With respect to revenue recognition - a method that s ecifies that the portion of the total profit of the sale that . s recognized in each pe riod is deter-mined by the percentage of the total sales price for which the seller has received cash.






24. A regression that expresses the dependen t and independent vari-ables as natural logarithms.






25. Securities held by banks or other financial intermediaries for trading purposes.






26. An option strategy involving the hold-ing of an asset and sale of a call on the asset.






27. The risk associated with the uncer-tainty of how derivative transactions will be regu-lated or with changes in regulations.






28. The difference between reported net income on an accrual basis and the cash flows from operating and investing activities.






29. A list of accounts used in an entity's accounting system.






30. A transformation that subtracts the value of the time series in period t - 1 from its value in period t.






31. A money measure of the goods and services produced within a country's borders over a stated time period.






32. The management of a company's short-term assets (such as inventory) and short-term liabilities (such as money owed to suppliers) .






33. An acquisition in which the acquirer gives the target company's shareholders some combination of cash and securities in exchange for shares of the target company's stock.






34. The condition of being of sufficient importance so that omission or misstatement of the item in a financial report could make a differ-ence to users' decisions.






35. The value of the U.S. dollar in terms of other currencies in the foreign exchange market.






36. Items that affect comprehensive income but which bypass the income statement.






37. The difference between the third and fi rst quarti les of a dataset.






38. Netting the market values of all contracts - not just derivatives - between parties.






39. The probability of the joint occur-rence of stated even ts.






40. A financial statement that reconciles beginning-of-period and end-of-period balance sheet values of cash; provides information about an entity's cash inflows and cash outflows as they pertain to oper-ating - investing - and financing activities.






41. The risk that a financial instrument cannot be purchased or sold without a significant concession in price due to the size of the market.






42. With reference to time-series mod-els - a model in which the growth rate of the time series as a function of time is constant.






43. An extra return that compen-sates investors for expected inflation.






44. A payment system in which cus-tomer payments are mailed to a post office box and the banking institution retrieves and deposits these payments several times a day - enabling the company to hav use of the fund sooner than in a centralized system in wh






45. A quantity whose future outcomes are uncertain.






46. Expectations that differfrom consensus expectations.






47. The currency of the primary economic environment in which an entity operates.






48. A tool that calculates the contri-bution to real CDP growth of each of its sources.






49. The strategy of using futures contracts to enter the market without an immediate outlay of cash.






50. An option in which the holder has the right to make a known interest payment and receive an unknown interest payment.