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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. Nonconvertible - noncallable preferred stock with a specified divi-dend rate that has a claim on earnings senior to the claim of common stock - and no maturity date.






2. Debt (fixed-income) securities that a company intends to hold to matu-rity; these are presented at their original cost - updated for any amortization of discounts or pr.emiums.






3. The amount at which an asset or liability is valued for tax purposes.






4. With respect to hypothesis testing - the rule according to which the null hypothesis will be rejected or not rejected; involves the compari-son of the test statistic to rejection point(s).






5. The risk associated with interest rates - exchange rates - and equity prices.






6. The condition in futures markets in which futures prices are lower than expected spot prices.






7. The difference between the observed value of a statistic and the quantity it is intended to estimate.






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






9. A si gle numerical estimate of an unknown quantity - such as a population parameter.






10. A random variable hav-ing the outcomes 0 and 1.






11. A business's value under a going-concern assumption.






12. A feature of futures markets in which futures prices provide valuable information about the price of the underlying asset.






13. A strategic corporate goal repre-senting the long-term proportion of earnings that the company intends to distribute to shareholders as dividends.






14. Is Derivatives in which the payoffs occur if a specific event occurs; generally referred to as options.






15. A type of weighted mean computed by averaging the reciprocals of the ohservations - then taking the reciprocal of that average.






16. Additional margin that must be deposited in an amount sufficient to bring the balance up to the initial margin requirement.






17. Ratios that measure how efficiently a company performs day-to-day tasks - such as the collection of receivables and management of inventory.






18. The rate at which periodic interest payments are calculated.






19. A measure of th e yield on the undel~ ing bond of a futures contract implied by pricing it as though the underlying will be delivered at the futures expiration.






20. Under U.S. GAAP - a mea-sure used in estimating a defined-benefit pension plan's liabilities - defined as the 'actuarial present value of vested benefits.'






21. A procedure for determining the interest on a bond or loan in which the interest is added onto the face value of a contract.






22. A measure of goodness-of-fit of a regres-sion that is adjusted for degrees of freedom and hence does not automatically increase when another independent variable is added to a regression.






23. A financial state-ment that reconciles beginning-of-period ana end-of-period balance sheet values of retained income; shows the linkage between the balance sheet and income statement.






24. The use of computer networks to conduct financial transactions electronically.






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






26. The fixed price at which an option holder can buy or sell the underlying.






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






28. An amount or percent-age deducted from the pro rata share of 100 per-cent of the value of an equity interest in a business to reflect the absence of some or all of the powers of control.






29. An act passed by the U.S. Con-gress in 2002 that created the Public Company Accounting Oversight Board (PCAOB) to oversee auditors.






30. An inter-national agreement signed in 1947 to reduce tar-iffs on international trade.






31. The most recent quarterly dividend multiplied by four.






32. The difference between the maximum and minimum values in a dataset.






33. With reference to the cash flow statement - a format for the presentation of the statement in which cash flow from operat-ing activities is shown as operating cash receipts less operating cash disburseme ts.






34. The condition in futures markets in which futures prices are higher than expected spot prices.






35. Investments in which investors exert significant influence - but not con-trol - over the investee. Typically - the investor has 20 to 50 % ownership in the investee.






36. 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.






37. A method for accounting forthe effect of convertible securities on earnings pershare (EPS) that specifies what EPS would havebeen if the convertible securities had been con-verted at the beginning of the period - taking account of the effects of conv






38. With reference to investment selection processes - an approach that starts with macro selection (i.e. - identifying attractive geo-graphic segments andVor industry segments) and then addresses selection 0 the most attractive investments within those






39. A multifactor model In which statistical methods are applied to a set of historical returns to determine portfolios that best explain either historical return covariances or vanances.






40. The ratio of a stock's market price to some m asure of va ue per share.






41. When assets trans-lated at the current exchange rate are greater in amount than liabilities translated at the current exchange rate. Assets exposed to translation gains or losses exceed the exposed liabilities.






42. The loss in the value of an option resulting from movement of the option price toward its payoff value as the expiration day approaches.






43. An attempt to acquire a com-pany against the wishes of the target's managers.






44. A person or organization seeking to profit by acquiring a company and reselling it - or seeking to profit from the takeover attempt itself (e.g. - greenmail).






45. Quantiles that divide a distribution into 100 equal parts.






46. The fixed rate at which the holder of an interest rate option can buy or sell the underlying.






47. The cash flow that is real-ized because of a decision; the changes or incre-ments to cash flows resulting from a decision or action.






48. Aka 'Residual income. '






49. Aka Liquidity discount.






50. Cannibalization occurs when an investment takes customers and sales away from another part of the company.