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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 market for short-term debt instruments (one-year maturity or less).






2. A third party that is sought out by the target company's board to purchase the target in lieu of a hostile bidde .






3. A time series regressed on its own past values - in which the independent vari-able is a lagged value of the dependent variable.






4. Behavior on the part of a firm that allows it to comply with the letter of the law but violate the spirit - significantly lessening the law's effects.






5. Costs that remain at the same level regardless of a company's level of production and sales.






6. A merger or acquisition that is to be paid for with cash; the cash for the merger might come from the acquiring company's existing assets or from a debt issue.






7. 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.






8. The differential of infor-mation between corporate insiders and outsiders regarding the company's performance and prospects. Managers typically have more informa-tion about the company's performance and prospects than owners and creditors.






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






10. Observations of a variable over time.






11. A wholly-owned sub-sidiary of a company that is established to provide financing of the sales of the parent company.






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






13. The quality of being relatively unaffected by a violation of assumptions.






14. In the context of the Treynor-Black model - the portfolio formed by mixing analyzed stocks of perceived nonzero alpha values. This portfolio is ultimately mixed with the passive mar-ket index portfolio.






15. When parties agree to exchange only the net amount owed from one party to the other.






16. A type of interest rate swap in which the floating payment is set at the end of the period and the interest is paid at that same time.






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






18. The percentage of a market that a particular fi rm supplies; used as the primary measure of monopoly power.






19. The sum of market value of common equity - book value of preferred equity - and face value of debt.






20. With reference to regression errors - errors that are correlated across observations.






21. A contract that spans a number of accounting periods.






22. Analysts who work for investment management fi rms - trusts - a d bank trust depart-ments - and similar institutions.






23. The process of systematically allocat-ing the cost of long-lived (tangible) assets to theperiods during which the assets are expected toprovide economic benefits.






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






25. The concept that dividends paid now displace earnings in all future periods.






26. Costs (e.g. - executives' salaries) that cannot be directly matched with the timing of rev-enues and which are thus expensed immediately.






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






28. A balance sheet that does not show subtotals for current assets and current liabilities.






29. The autocorrelation of the error term.






30. A variation of a floating-rate note that has some type of unusual characteristic such as a leverage factor or in which the rate moves opposite to interest rates.






31. With reference to a sample - the mean of the absolute values of deviations from the sample mean.






32. A level of inventory beyond anticipated needs that provides a cushion in the event that it takes longer to replenish inventory than expected or in the case of greater than expected demand.






33. A forward contract calling for one party to make a fixed interest payment and the other to make an interest pay-ment at a rate to be determined at the contract expiration.






34. A perpetual annuity - or a set of never-ending level sequential cash flows - with the first cash flow occurring one period from now.






35. An option in which the underlying is a bond; primarily traded in over-the-counter markets.






36. With reference to fundamental factor models - the value of the attribute for an asset minus the average value of the attribute across all stocks - divided by the standard deviation of the attribute across all stocks.






37. Any test (or procedure) concerned with parameters or whose validity depends on assumptions concerning the population generat-ing the sample.






38. Profits lost from not having suffi-cient inventory on hand to satisfy demand.






39. The last in - first out - method of accounting for inventory - which matches sales against the costs of items of inventory in the reverse order the items were placed in inventory (i.e. - inventory produced or acquired last are assumed to be sold firs






40. The amount that each unit sold contributes to covering fixed costs- that is - the difference between the price per unit and the variable cost per unit.






41. The study of how data can besummarized effectively.






42. An activity ratio calculated as revenue divided by average total assets.






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






44. Assets less liabilities; the residual interest in the assets after subtracting the liabilities.






45. The return that an investorearns during a specified holding period; a syn-onym for total return.






46. An amount equal to saving minus investment.






47. Probabilities reflecting beliefs prior to the arrival of new information.






48. Numbers produced by random number generators.






49. A transformation that involves sub-tracting the mean and dividing the result by the standard deviation.






50. A profitability ratio calcu-lated as net income divided by average sharehold-ers' equity.