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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. With reference to investmentselection processes - an approach that involves selection from all securities within a specified investment universe - i.e. - without prior narrowiNg of the universe on the bas' s of macroeconomj c or overall market consid






2. The day that the company actually mails out (or electronically transfers) a dividend payment.






3. A variation of a straddle in which the put and call have different exercise prices.






4. The yield to maturity on a basis that ignores compounding.






5. Aka Harmonic mean.






6. A financial statement that reconciles the beginning-of-period and end-of-period balance sheet values of shareholders' equity; provides information about all factors affecting shareholders' equity.

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7. The official price - designated by the clearinghouse - from which daily gains and losses will be determined and marked to market.






8. Aka marking to market.






9. A third party that is sough t out bX the tar-get c0mpany's board to Burchase a substantial minority stake in the target-enough to block a hostile takeover without selling the entire company.






10. An active investment strategy that includes intentional matching of the timing of cash outflows with investment maturities.






11. An option strategy in which a long position in a certain number of options is offset by a short position in a certain number of other options on the same underlying - resulting in a risk-free position.






12. The currency in which finan-cial statement amounts are presented.






13. With reference to regression - the set of variables included in the regression and the regression equation's functional form.






14. The rate of return required by suppliers of capital for an individual source of a company's funding - such as debt or equity.






15. A measure of VAR equivalentto the analytical method bu t that refers to the use of delta to estimate the option's price sensitivity.






16. An activity ratio equal to the number of days in the period divided by inventory turnover over the period.






17. The nonmonetary return offered by an asset when the asset is in short supply - often associated with assets with seasonal production processes.






18. In the context of the weighted average cost of capital (WACC) - a break point is the amount of capital at which the cost of one or more of the sources of capital changes - leading to a change in the WACC.






19. FIrm The cash flow available to the company's suppliers of capital after all operat-ing expenses (including taxes) have been paid and necessary investments in working and fixed capital have been made.






20. The portfolio that exploits an arbitrage opportunity.






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






22. The amount for which one can sell some-thing - or the amount one must pay to acquire something.






23. The portion of an entity's income that is subject to income taxes under the tax laws of its jurisdiction.






24. A specialized computer program or a spreadsheet that solves for the portfolio weights that will result in the lowest risk for a specified level of expected return.






25. The slope of the capital market line - indicating the market risk premium for each unit of market risk.






26. Selling a product in slightly altered forms to different groups of consumers.






27. Quantiles that divide a distribution into 10 equal parts.






28. A procedure used primarily in futures markets in which the parties to a contract settle the amount owed daily. Also known as the daily settlement.






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






30. A spontaneous form of credit in which a purchaser of the goods or service is financing its purchase by delaying the date on which payment is made.






31. The market value of debt and equity.






32. The intercept and slope coefficient(s) of a regression.






33. An option to enter into a swap.






34. A number between - 1 and + 1 that measures the co-movement (linear association) between two random variables.






35. The divisor in the expression for the value of a perpetuity.






36. A procedure for determining the interest on a loan or bond in which the interest is deducted from the face value in advance.






37. For accounting purposes - the exchange rates that existed when the assets and liabilities were initially recorded.






38. The mix of debt and equity that a company uses to finance its business; a company's specific mixture of long-term financing.






39. The fixed price or rate at which the transaction scheduled to occur at the expiration of a forward contract will take place. This price is agreed on at the initiation date of the contract.






40. The first date that a share trades without (i.e. - 'ex') the dividend.






41. For a give period - equal to begi ning inventory minus entling inventory JDlusthe cost 0 goods auqui red or produced duringthe period.






42. The difference between net operating assets at the end and the beginning of the period compared to the average net operating assets over the period.






43. A listing in which tile order of tile listed items does not matter.






44. In the con-text of private company valuation - valuation model based on an assumption of a constant growth rate of free cash flow to the firm or a con-stant growth rate of free cash flow to equity.






45. The hypothesis accepted when the null hypothesis is rejected.






46. A method of identifying the basic elements of the overall capitalization rate.






47. With reference to the error term of a regression - having a variance that differs across observations.






48. When a bankrupt company is allowed to enforce contracts that are favorable to it while walking away from contracts that are unfa-vorable to it.






49. Commercial and investmentbanks that make markets in derivatives.






50. An activity ratio equal to the number of days in a period divided by the payables turnover ratio for the period; an estimate o the average { lUmber of days i takes a company to pay its su pliers.






Can you answer 50 questions in 15 minutes?



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