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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 rate of interest based on the secu-rity's face value.






2. The dollar amount of cash divi-dends paid during a period per share of common stock.






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






4. Aka Harmonic mean.






5. A test of a strategy or model using a sample outside the time period on which the strategy or model was developed.






6. Quantiles that divide a distribution into 100 equal parts.






7. A merger involving the pur-chase of a target that is farther along the value or production chain; for example - to acquire a distributor.






8. The portfolio that exploits an arbitrage opportunity.






9. The potential for asymmetric information to bring about a general decline in product quality in an industry.






10. Financial ratios measuring the com-pany's ability to meet its short-term obligations.






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






12. The strategy a company fol-lows with regard to the amount and timing of div-idend payments.






13. A mean computed after assigning a stated percent of the lowest values equal to one specified low value - and a stated percent of the highest values equal to one specified high value.






14. The money of other countries regardless of whether that money is in the form of notes - coins - or bank deposits.






15. A normal operating expense that has been paid in advance of when it is due.






16. A financial covenant made in conjunction with existing debt that restricts a company's ability to incur additional debt at the same seniority based on one or more financial tests or conditions.






17. The time between settlement dates.






18. The amount of funds originally invested in a project or instrument; the face value to be paid at maturity.






19. Cash and investments (specifi-cally cash - cash equivalents - and short-term investments) .






20. The status of a company in the sense of whether it is assumed to be a going con-cern or not.






21. A forecasting process in which the next period's value as predicted by the forecasting equation is substituted into the right-hand side of the equation to give a predicted value two periods ahead.






22. A company's profits on its usual business activities before deducting taxes.






23. 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.






24. The present discounted value of future cash flows: For assets - the present dis-counted value of the future net cash inflows that the asset is expected to generate; for liabilities - the present discounted value of the future net cash outflows that a






25. An arrangement whereby a customer authorizes a debit to a demand account; typically used by companies to collect routine pay-ments for services.






26. A method of revenue recognition in which - in each accounting period - the company estimates what percentage of the contract is complete and then reports that per-centage of the total contract revenue in its income statement.






27. Heteroskedasticity in the error variance that is correlated with the values of the independent variable(s) in the regression.






28. An activity ratio equal to the number of days in a period divided by the payables turnover ratio for the period; an estimate o the average { lUmber of days i takes a company to pay its su pliers.






29. A record of the change in official reserves - which are the government's holdings offoreign currency.






30. In reference to short-term cash man-agement - an investment strategy characterized by monitoring and attempting to capitalize on mar-ket conditions to optimize the risk and return relationship of short-term investments.






31. Income approach that values an asset based on estimates of future cash flows discounted to present value by using a discount rate reflective of the risks associated wi th the cash flows.






32. The annual percentage change in real CDP.






33. The portion of the minimum-variance frontier beginning with the global mmlmum-variance portfolio and continuing above it; the graph of the set of portfolios offering the maximum expected return for their level of variance of return.






34. A probability based on logical analysis rather than on observation or personal judgment.






35. The time remaining in the life of a derivative - typically expressed in years.






36. A graph of a frequency distri-bution obtained by drawing straight lines join-ing successive points representing the class frequencies.






37. The actual amount paid for income taxes in the period; not a provision - but the actual cash outflow.






38. The study of how data can besummarized effectively.






39. Provision for a return of invest-ment - net of value appreciation.






40. A combination of a long cap and a short floor - or a short cap and a long floor. A col-lar in general can have an underlying other than an interest rate.






41. Analysis that shows the changes in key financial quantities that result from given (economic) events - such as the loss of customers - the loss of a supply source - or a catastrophic event; a risk management technique involving examina-tion of the pe






42. A possible value of a random variable.






43. With respect to revenue recognition - a method that s ecifies that the portion of the total profit of the sale that . s recognized in each pe riod is deter-mined by the percentage of the total sales price for which the seller has received cash.






44. The establishment of objectives for individuals - groups - or divisions of an organiza-tion that takes into account the allocation of an acceptable level of risk.






45. The evaluation of credit risk; the evaluation of the creditworthiness of a borrower o r counterpar ty.






46. A general strategy usually thought of as reducing - if not eliminating - risk.






47. An activity ratio calculated as purchases divided by average trade payables.






48. The science of describing - analyzing - and drawing conclusions from data; also - a collection of numerical data.






49. The stage of growth between the growth phase and the mature phase of a company in which earnings growth typically slows.






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