Test your basic knowledge |

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. Liabilities related to expenses that have been incurred butnot yet paid as of the end of an accountingperiod-an example of an accrued expense is rent that has been incurred but not yet paid -resulting in a liability 'rent payable.'






2. 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.






3. Controlling additional property throughreinvestment - refinancing - and exchanging.






4. Orders to buy or sell that are too large for the liquidity ordinarily available in dealer networks or stock exchanges.






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






6. The risk that failures by company man-agers to effectively manage a company's environ-mental - social - and governance risk exposures will lead to lawsuits and other judicial remedies - resulting in potentially catastrophic losses for the company; th






7. The required rate of return on com-mon stock.






8. Regression that models the straight-line relationship between the dependent and independen t variable (s) .






9. Unex-pected earnings per share divided by the standard deviation of unexpected earnings per share over a specified prior time period.






10. A pre-offer takeover defense mech-anism involving the corporate charter (e.g. - stag-gered boards of directors and supermajority provisions) .






11. Describes two time series that have a long-term financial or economic relationship such that they do not diverge from each other without bound in the long run.






12. An inventory account-ing method that identifies which specific inventory items were sold and which remained in inventory to be carried over to later periods.






13. The number of units produced and sold at which the company's net income is zero (revenues = total costs).






14. A swap in which each party makes ayments to the other in different currenmes.






15. The analysis of portfolio performance in terms of the contribu-tions from various sources of risk.






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






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






18. A merger; the term may be applied to any transaction - but is often used in reference to hos-tile transactions.






19. The minimum real wage rate needed to maintain life.






20. The investigation of issues relating to the accuracy of reported accounting results as reflections of economic per-formance; quality of earnings analysis is broadly understood to include not only earnings manage-ment - but also balance sheet manageme






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






22. Bias that may result when failed or defunct companies are excluded from member-ship in a group.






23. In accounting contexts - cash on hand (e.g. - petty cash and cash not yet deposited to the bank) and demand deposits held in banks and similar accounts that can be used in payment of obligations.






24. The positive square root of semivari-ance (sometimes called semistandard deviation) .






25. An estimate of the equity risk pre-mium that is based upon estimates provided by a panel of finance experts.






26. The owners' remaining claim on the company's assets after the liabilities are deducted.






27. A procedure by which a population is divided into subpopulations (strata) based on one or more classification criteria. Sim-ple random samples are then drawn from each stratum in sizes proportional to the relative size of each stratum in the populati






28. Heightened uncertainty regarding a company's ability to meet its various obligations because of lower or negative earnings.






29. A set of techniques for estimating losses in extremely unfavorable combinations of events or scenarios.






30. A type of subsidiary engaged in derivatives trans-actions that is separated from the parent company in order to have a higher credit rating than the parent company.






31. A measure of disper-sion relating to a population in the same unit of measurement as the observations - calculated as the positive square root of the population variance.






32. A merger involving compa-nies that are in unrelated businesses.






33. R The correlation between the actual and forecasted values of the dependent variable in a regression.






34. The rate of dividend (and earnings) growth that can be sustained over time for a given level of re turn on equity - keeping the capi tal structure constant and wi thout issuing addi tional common stock.






35. The difference between the actual value per share and the no-growth value per share.






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






37. The risk attributed to the operating cost structure - in particular the use of fixed costs in operations; the risk arising from the mix of fixed and variable costs; the risk that a company's operations may be severely affected by environ-mental - soc






38. Amounts that a business owes to its vendors for goods and services that were pur-chased from them but which have not yet been paid.






39. A financial instrument that gives one party the right - but not the obligation - to buy or sell an underlying asset from or to another party at a fixed price over a specific period of time. Also referred to as contingent claims.






40. The probability of an event given (conditioned on) another event.






41. Total company valme (the market value of debt - common equity - and preferred equity) minus the value of cash and investments.






42. The day that options are granted to employees; usually the date that compensation expense is measured if both the number of shares and option price are known.






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






44. The quantity of goods and services that a country exports to pay for its imports of goods and services.






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






46. Aka 'Residual income. '






47. The present value of an investment's cash inflows (benefits) minus the present value of its cash outflows (costs).






48. A finance perspective on capital markets that deals with the relationship of price to intrinsic value. The traditional efficient mar-kets formulation asserts that an asset's price is the best available estimate of its intrinsic value. The rational ef






49. 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.






50. Debt or equity financial assets bought with the inten-tion to sell them in the near term - usually less than three months; securities that a company intends to trade.