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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. An option on the yield spread on a bond.






2. A forward contract in which the underlying is a foreign currency.






3. Standard errors of the esti-mated parameters of a regression that correct for the presence of heteroskedastici ty in the regres-sion's error te






4. An activity ratio calculated as purchases divided by average trade payables.






5. The number of observations in a given interval (for grouped data) .






6. A widely used approach to estimate an overall capitalization rate. It is based on the premise that debt and equity financ-ing is typically involved in a real estate transaction.






7. A swap in which the floating payments have an upper limit.






8. The cost to a com pany of issu-ing preferred stock; the dividend yield that a com-pany must commit to pay preferred stockholders.






9. The rule that - on the average - with no change in technology - a 1 percent increase in capital per hour of labor brings a 1/3 percent increase in labor productivity.






10. Attempts by management to encourage analysts to forecast a slightly lower number for expected earnings than the analysts would otherwise forecast.






11. The combination of calls - the underly-ing - and risk-free bonds that replicates a put option.






12. Agreements made by a company in bankruptcy under which a company's capital struc-ture is altered and/ or alternative arrangements are made for debt repayment; U.S. Chapter II bankruptcy. The company emerges from bank-ruptcyas a going concern.






13. The quoted interest rate per period; the stated annual interest rate divided by the number of compounding periods per year.






14. A permissible delivery procedure used by futures market participants - in which the long and short arrange a delivery pro-cedure other than the normal procedures stipu-lated by the futures exchange.






15. A floating-rate note or bond in which the coupon is adjusted at a multiple of a benchmark interest rate.






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






17. The income tax owed by the company on the basis of taxable income.






18. An inventory accounting method in which the sales value of an item is reduced by the gross margin to calculate the item's cost.






19. An international organi-zation that places greater obligations on its mem-ber countries to observe the GATT rules.






20. An exchange rate pegged at a value decided by the government or central bank and that blocks the unregulated forces of demand and supply by direct intervention in the foreign exchange market.






21. The risk of a change in value between the transaction date and the settlement date of an asset or liability denominated in a for-eign currency.






22. The sale - liquidation - or spin-off of a d'vi-sion or subsidiary.






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






24. A model of stock val-uation that views a stock's intrinsic value as the present value of expected future free cash flows to equity.






25. 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.






26. The estimated fair value of the price multiple - usually based on fore-casted fundamentals or comparables.






27. A balance sheet asset that arises when an excess amount is paid for income taxes relative to accounting profit. The taxable income is higher than accounting profit and income tax payable exceeds tax expense. The company expects to recove r the differ






28. The average squared deviation below a target value.






29. A form of centralized risk management that typically encompasses the man-agement of a broad variety of risks - ind uding insuran -ce risk.






30. The present discounted value of future cash flows: For assets - the present dis-counted value of the future net cash inflows that the asset is expected to generate; for liabilities - the present discounted value of the future net cash outflows that a






31. The probabili ty that a confi-dence interval ind udes the unknown population parameter.






32. Observations of a variable over time.






33. A sample measure of the degree of a distribution's peakedness in excess of the normal distribution's peakedness.






34. A condition in the futures markets in which the price at which a transaction would be made is at or beyond the price limits.






35. A series of put options on an interest rate - with each option expiring at the date on which the floating loan rate will be reset - and with each option having the same exercise rate. A floor in general can have an underlying other than the interest






36. The positive square root of the sample variance.






37. A probability drawing on per-sonal or subjective judgment.






38. The differ-ence between net operating assets at the end and the beginning of the period.






39. Above average or abnormally high growth rate in earnings per share.






40. An intangible that cannot be acquired singly and that typically possesses an indefinite benefit period; an example is account-ing goodwill.






41. A merger in which the company being purchased becomes a subsidiary of the purchaser.






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






43. Forecasted dividends per share over the next year divided by current stock price.






44. A measure of the co-movement (linearassociation) between two random variables.






45. The owners of a joint venture. Each is active in the management and shares control of the joint venture.






46. Segment profit (loss) divided by segment revenue.






47. The stage of growth between the growth phase and the mature phase of a company in which earnings growth typically slows.






48. A loss in value caused bychanges in price levels. Monetary assets experi-ence purchasing power losses during periods ofinflation.






49. An approach to portfolio analysis using expected means - variances - and covariances of asset returns.






50. (Aka forward rate agreement)