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. 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.






2. With reference to estimators - describes an estimator for which the probability of estimates close to the value of the population parameter increases as sample size increases.






3. The risk that portfolio value will fall below some minimum acceptable level over some time horizon.






4. The proportional annual benefit that results from making an investment.






5. Amounts owed by a business to credi-tors as a result of borrowings that are evidenced by (short-term) loan agreements. n-Period moving average The average of the current and immediately prior n - 1 values of a time series.






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






7. An intangible that can beacquired singly and is typically linked to specificrights or privileges having finite benefit periods(e.g. - a patent or trademark).






8. A form ofcommon-size analysis in which the accounts in agiven period are used as the benchmark or baseperiod - and every account is restated in subse-quent periods as a percentage of the base period'ssame account.






9. A contract signed by both parties to a merger that clarifies the details of the transaction - including the terms - war-ranties - conditions - termination details - and the rights of all parties.






10. Present obligations of an enterprise aris-ing from past events - the settlement of which is expected to result in an outflow of resources embodying economic benefits; creditors' claims on the resources of a company.






11. 1) An agent who executes orders to buy orsell securities on behalf of a client in exchange for a commission. 2) See Futures commission merchants.






12. The amount of book value (also called carrying value) of common equity per share of common stock - calculated by dividing the book value of shareholders' equity by the num-ber of shares of common stock outstanding.






13. 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.






14. An accelerated depre-ciation method - i.e. - one that allocates a relativelylarge proportion of the cost of an asset to the early years of the asset's useful life.






15. Rate of return that dis-counts future cash flows from an investment to the exact amount of the investment; the discount rate that makes the present value of an invest-ment's costs (outflows) equal to the present value of the investment's benefits (in






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






17. Assets that are expected to provide economic benefits over a future period of time - typically greater than one year.






18. An exchange rate is deter-mined by demand and supply with no direct inter-vention in the foreign exchange market by the central bank.






19. The date on which the parties to a swap make payments.






20. A range that has a given proba-bility that it will contain the population parameter it is intended to estimate.






21. 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.






22. A depreciation method tHat allocates the cost of a long-lived asset based on-actual usage during the period .






23. A poison pill takeover defense that gives target company shareholders the right to purchase shares of the acquirer at a significant discount to the market price - which has the effect of causing dilution to all existing acquiring com-pany shareholder






24. A tool that calculates the contri-bution to real CDP growth of each of its sources.






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






26. 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.






27. 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.






28. Method of valu-ing property based on recen t sales prices of simi-lar properties.






29. Observations of a variable over time.






30. Valuation indi-cators that compare a stock's performance during a period either to its own past performance or to the performance of some group of stocks.






31. The graph of the capital asset pricing model.






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






33. Analysts who work at brokerages.






34. Events such that only one can occur at a time.






35. The variance of active returns; active risk raised to the second power.






36. Approach to trans-lating foreign currency financial statements for consolidation in which monetary assets and liabil-ities are translated at the current exchange rate. Nonmonetary assets and liabilities are translated at historical exchange rates (th






37. A synonym for robust standard errors.






38. A quantity computed from or used to describe a sample of data.






39. The set of assets available for investment.






40. Assets that are expected to bene-fit the company over an extended period of time (usually more than one year).






41. A graphical representa-tion of the expected return and risk of all portfo-lios that can be formed using two assets.






42. 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.






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






44. Financial statements in which all elements (accounts) are stated as a per-centage of a key figure such as revenue for an income statement or total assets for a balance sheet.






45. Valuation approach that values an asset as the present discounted value of the income expected from it.






46. Earnings adjusted for nonrecur-ring - non-economic - or other unusual items to elim-inate anomalies andlor facilitate comparisons.






47. In the context of customer receipts - the amount of money that is in transit between pay-ments made by customers and the funds that are usable by the company.






48. The tendency of a time series to fall when its level is above its mean and rise when its level is below its mean; a mean-reverting time series tends to re turn to its long-term mean.






49. An option strategy involving the hold-ing of an asset and sale of a call on the asset.






50. Aka 'Residual income.'