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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 number of indepen-dent observations used.






2. The difference between reported earnings per share and expected earnings per share.






3. Temporary differ-ences that result in a taxable amount in a future period when determining the taxable profit as the balance sheet item is recovered or settled. t-Distribution A symmetrical distribution defined by a single parameter - degrees of free






4. The combining of the results of oper-ations of subsidiaries with the parent compaIL y to present financial statements as if they were a sin-gle economic unit. The asset - iabilities - revenues and expenses of the subsidiaries are combined with those






5. A taxable loss in the current period that may be used to reduce future taxable income.






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






7. A method for determining the required rate of return on equity as the sum ofrisk premiums - in which one or more of the risk premiums is typically subjective rather than grounded in a formal equilibrium model.






8. The extent to which a company's operations are predictable with substantial confidence.






9. Systems that capture transaction data at the physical location in which the sale is made.






10. 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.






11. 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






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






13. Accounting in which some income items are reported as part of stockholders' equity rather than as gains and losses on the income statement; certain items of comprehensive income bypass the income statement and appear as direct adjustments to sharehol






14. In the fixed income markets - to price a security on the basis of valuation-relevant char-acteristics (e.g. - debt-rating approach).






15. Real CDP divided by the population.






16. A profitability ratio calculated as (net income - preferred divi-dends) divided by average common equity; equal to the return on equity ratio when no preferred equity is outstanding.






17. Observations through time on a single characteristic of multiple observational units.






18. A measure of central tendency computed by taking the nth root of the product of n non-negative values.






19. An option in which the underly-ing is an interest rate.






20. 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.






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. Ratio of sales on credit to the average balance in accounts receivable.






23. The sale by a foreign firm of exports at a lower price than the cost of production.






24. The most common type of commun-size analysis - ill which the accounts in a given period are compared to a benchmark item in that same year.






25. The number of units pro-duced and sold at which the company's operating profit is zero (revenues = operating costs).






26. A regression that expresses the dependen t and independent vari-ables as natural logarithms.






27. An option to enter into a swap.






28. The rate of return that must be met fora project to be accepted.






29. A distribution that specifies the probabilities for a single random variable.






30. Futures contracts in which the underlying is a traditional agricultural - metal - or petroleum product.






31. 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.






32. 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.






33. The compound rate of growth of one unit of currency invested in a port-folio during a stated measurement period; a mea-sure of investment performance that is not sensitive to the timing and amount of withdrawals or additions to the portfolio.






34. The internal rate of return on a portfol io - taking account of all cash flows.






35. A quantitative measure of skew (lack of symmetry); a synonym of skew.






36. Revenue after adjustments (e.g. - for estimated returns or for amounts unlikely to be collected).






37. The goods and services that we sell to peo-ple in other countries.






38. The process of determining the value of an asset or service on the basis of variables per-ceived to be related to future investment returns - or on the basis of comparisons with closely similar assets.






39. The margin requirement on any day other than the first day of a transaction.






40. 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.






41. A merger in which one company ceases to exist as an identifiable entity and all its assets and liabilities become part of a purchasing company.






42. A reduction in the number of shares outstanding with a corresponding increase in share price - but no change to the company's underlying fundamentals.






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






44. The normal density with mean equal to 0 and standard deviation (0') equal to l.






45. A swap in which the floating rate is the cumulative value of a single unit of currency invested at an overnight rate dur-ing the settlement period.






46. Equity shares that are subordinate to all other types of. equity (e.g. - p refe rred equi ty) .






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






48. A statistical model used to clas-sifY borrowers according to creditworthiness.






49. With respect to double-entry accounting - a credit records increases in liability - owners' equity - and revenue accounts or decreases in asset accounts; with respect to borrowing - the willing-ness and ability of the borrower to make promised paymen






50. The amount of income earned during a period per share of common stock.







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