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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 risk associated with the pos-sibility that a payment due at a later date will not be made.






2. A measurement scale that sorts data into categories that are ordered (ranked) with respect to some characteristic.






3. The most recent quarterly dividend multiplied by four.






4. A stock's current mar-ket price divided by the most recent four quarters of earnings per share.






5. Quantiles that divide a distribution into five equal parts.






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






7. The rate of dividend (and earnings) growth that can be sustained over time for a given level of re turn on equity - keeping the capi tal structure constant and wi thout issuing addi tional common stock.






8. The share price at a particular point in the future.






9. The excess of assets over liabilities; the residual interest of shareholders in the assets of an entity after deducting the entity's liabilities.

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10. Revenue that has been earned but not yet billed to customers as of the end of an accounting period.






11. Debt or equity financial assets bought with the inten-tion to sell them in the near term - usually less than three months; securities that a company intends to trade.






12. Making forecasts - estimates - or judgments about a larger group from a smaller group actually observed; using a sample statistic to infer the value of an unknown population parameter.






13. A mean computed after assigning a stated percent of the lowest values equal to one specified low value - and a stated percent of the highest values equal to one specified high value.






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






15. The evaluation of risk-adjusted performance; the evaluation of invest-ment skill.






16. A diagram with branches emanating from nodes representing either mutually exclu-sive chance events or mutually exclusive decisions.






17. The actual amount paid for income taxes in the period; not a provision - but the actual cash outflow.






18. A depreciation method that allocates evenly the cost of a long-lived asset less its estimated residual value over the estimated useful life of the asset.






19. With reference to grouped data - the most frequently occurring interval.






20. The contri-bution to active risk squared resulting from the portfolio's active weights on individual assets as those weights interact with assets' residual risk.






21. A poison pill takeover defense that dilutes an acquirer's ownership in a target by giv-ing other existing target company shareholders the right to buy additional target company shares at a discount.






22. A striNgent measure of liquidity th t ind'cates a company's ab'li ty to satisfY current liabilities with its most liquid assets - calcu-lated as (cash + short-tenn marketable invest-ments + receivables) divided by current liabilities.






23. Assets that are expected to bene-fit the company over an extended period of time (usually more than one year).






24. A quantitative measure that describes the location or distribution of data; includes not only measures of central tendency but also other measures such as percentiles.






25. The relationship amongputs - calls - and forward contracts.






26. With reference to equity investors - investors who are focused on paying a relatively low share price in relation to earnings or assets per share.






27. The extent to which a company can effect - through the use of debt - a propor-tional change in the re turn on common equity that is greater than a given proportional change in operating income; also - short for the financial leverage ratio.






28. With reference to regression analysis - the estimated values of the population intercept and population slope coeffi-cien t(s) in a regression.






29. The cash flow available to a company's common shareholders after all operat-ing expenses - interest - and principal payments have been made - and necessary investments in working and fixed capital have been made.






30. An estimate of the country spread (country equity premium) for a develop-ing nation that is based on a comparison of bonds yields in country being analyzed and a developed country. The sovereign yield spread is the differ-ence between a government bo






31. The amount of cash payable by a company to the bondholders when the bonds mature; the promised payment at maturity sepa-rate from any coupon payment.






32. The risk associated with the pos-sibility that a payment currently due will not be made.






33. A measure of the expected annual cash flow from the operation of a real estate investment after all expenses but before taxes.






34. Common-size analysis using only one reporting period or one base financial state-ment; fo r example - an income statement in which all items are stated as percentages of sales.






35. The feature of a futures contract giv-ing the short the right to make decisions about what - when - and where to deliver.






36. The quantity of real CDP pro-duced by an hour of labor.






37. A poison pill provision that allows for the redemption or cancellation of a poi-son pill provision only by a vote of coNtinuing directors (generally directors who were on the tar-get company's board p rior to the takeover attempt) .






38. The amount by which the takeover price for each share of stock must exceed the current stock price in order to entice shareholders to relinquish control of the com-pany to an acquirer.






39. The after-tax net operating profits as a percent of total assets or capital.






40. A bank commitment to extend credit up to a pre-specified amount; the commitment is considered a short-term liability and is usually in effect for 364 days (one day short of a full year).






41. A reserve created against deferred tax assets - based on the likelihood of realizing the deferred tax assets in future account-ing periods.






42. A valuation ratio calculated as price per share divided by book value per share.






43. Earnings per share divided by price; the reciprocal of the PIE ratio.






44. A transaction executed inthe foreign exchange market in which a currencyis purchased (sold) and a forward contract is sold(purchased) to lock in the exchange rate forfuture delivery of the currency. This transactionshould earn the risk-free rate of t






45. The principle that dol-lar amounts indexed at the same point in time are additive.






46. Amounts customers owe the company for products that have been sold as well as amounts that may be due from suppliers (such as for returns of merchandise).






47. The value of skills and knowledgepossessed by the workforce.






48. ID) With respect to random variables - the property of ran-dom variables that are independent of each otherbut follow the identical probability distribution.






49. The probability that an asset's value moves up.






50. The positive square root of the sample variance.