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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. A record of receipts from exports of goods and services - payments for imp<ilrts of goods and services - net income and net transfers received from the rest of the world.






2. The number of successes in n Bernoulli trials for which the probability of success is constan t for all trials and the trials are independent.






3. A transaction in which a company buys back its own shares. Unlike stock dividends and stock splits - share repurchases use corporate cash.






4. The difference between inventory reported as FIFO and 'nventory reported as LIFO (FIFO inventory value less LIFO inventory val e).






5. Temporary differ-ences that result in a red uction of or deduction from taxal:J e income in a future period when the balance sheet item is n~ covered or settled.






6. American Free Trade Agreement An agree-ment - which became effective on January 1 - 1994 - to eliminate all barriers to international trade between the United States - Canada - and Mexico after a 15-year phasing-in period.






7. For accounting purposes - the spot exchange rate on the balance sheet date.






8. The differences between actual and predicted value of time series outside the sample period used to fit the model.






9. The amount by which a unit of currency will grow in a year with interest on inter-est included.






10. The prooability of an observation - given a par ticular set of conditions.






11. An offset to property - plant - and equipment (PPE) reflecting the amount of the cost of PPE that has been allocated to current and previous accounting periods.






12. A transaction in exchange-listed deriva-tive markets in which a party re-enters the market to close out a position.






13. 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.






14. The capital structure at which the value of the company is maximized.






15. The difference between reported net income on an accrual basis and the cash flows from operating and investing activities.






16. A measure of dispersion relat-ing to a population - calculated as the mean of the squared deviations around the population mean.






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






18. An approach to investment analysis and security selection.






19. An acquisition in which the acquirer purchases the target company's assets and pay-ment is made directly to the target company.






20. With reference to a random vari-able - the property of having characteristics such as mean and variance that are not constant through time.






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






22. A theory of economic growth based on the view that the growth of real GDP per person is temporary and that when it rises above subsistence level - a population explo-sion eventually brings it back to subsistence level.






23. The percentage of total earnings paid out in dividends in any given year (in per-share terms - DPS/ EPS).






24. An option to enter into a swap.






25. The after-tax net operating profits as a percent of total assets or capital.






26. A dollar deposited outside the United States.






27. Netting the market values of all contracts - not just derivatives - between parties.






28. Public-company com-parables for the company being valued.






29. The official price - designated by the clearinghouse - from which daily gains and losses will be determined and marked to market.






30. Analysis that involves com-parisons across individuals in a group over a given time period or at a given point in time.






31. Each value on a binomial tree from which suc-cessive moves or outcomes branch.






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






33. An amount equal to net taxes minus government expenditure on goods and services.






34. A limit move in the futures market in which the price at which a transaction would be made is at or below the lower limit.






35. An industry's underlying eco-nomic and technical characteristics.






36. A profitability ratio calcu-lated as net income divided by average total assets; indicates a company's net profit generated per dollar invested in total assets.






37. With reference to regression - the set of variables included in the regression and the regression equation's functional form.






38. 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.






39. The perceived ability of the bor-rower to pay what is owed on the borrowing in a timely manner; it represents the ability of a com-pany to withstand adverse impacts on its cash flows.






40. Estimated selling price in the ordinary course of business less the estimated costs necessary to make the sale.






41. A quantity whose future outcomes are uncertain.






42. The analyst'S estimate of a stock's value at a particular point in the future .






43. The assumption of equal priorprobabilities.






44. A business's value under a going-concern assumption.






45. The difference between the yield on a bond and the yield on a default-free security - usu-ally a government note - of the same maturity. The yield spread is primarily determined by the mar-ket's perception of the credit risk on the bond.






46. An option strategy involving the purchase of one option and sale of another option that is identical to the first in all respects except either exercise price or expiration.






47. A common or underlying element with which several variables are correlated.






48. The cash flow that is real-ized because of a decision; the changes or incre-ments to cash flows resulting from a decision or action.






49. The market value of a swap.






50. A floating-rate note or bond in which the coupon is adjusted to move opposite to a benchmark interest rate.