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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 value of the U.S. dollar expressed in units of foreign currency per U.S. dollar.






2. The estimated fair value of the price multiple - usually based on fore-casted fundamentals or comparables.






3. With respect to the format of the income statement - a format that does not subtotal for gross profit (revenue minus cost of goods sold) .






4. Ratios that measure the quantity of an asset or flow (e.g. - earnings) in relation to the price associated with a specified claim (e.g. - a share or ownership of the enterprise).






5. The statistical measure that indicates the peakedness of a distribution.






6. An entity (partnership - corporation - or other legal form) where control is shared by two or more entities called venturers.






7. Additional margin that must be deposited in an amount sufficient to bring the balance up to the initial margin requirement.






8. Nonconvertible - noncallable preferred stock with a specified divi-dend rate that has a claim on earnings senior to the claim of common stock - and no maturity date.






9. A statistical test for differ-ences based on paired observations drawn from samples that are dependent on each other.






10. The line with an inter-cept point equal to the risk-free rate that is tangent to the efficient frontier of risky assets; represents the efficient frontier when a risk-free asset is available for investment.






11. The average squared deviation below the mean.






12. A multifactor model in which the factors are attributes of stocks or com-panies that are important in explaining cross-sectional differences in stock prices.






13. Stan-dard errors of the estimated parameters of a regression that correct for the presence of het-eroskedasticity in the regression's error term.






14. 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.






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






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






17. The part of the execution step of the portfolio manage-ment process in which investment strategies are integrated with expectations to select a portfolio of assets.






18. Small numbers of observations at either extreme (small or large) ofa sample.






19. An intangible that cannot be acquired singly and that typically possesses an indefinite benefit period; an example is account-ing goodwill.






20. The fixed price at which an option holder can buy or sell the underlying.






21. Cash-settled for-ward contracts - used predominately with respect to foreign exchange forwards.






22. Investments in which the investor has no signifi-cant influence or control over the operations of the investee.






23. The risk associated with the pos-sibility that a payment due at a later date will not be made.






24. 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.






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






26. A method of account-ing for joint ventures where the venturer's share of the assets - liabilities - income and expenses of the joint venture are combined on a line-by-line basis with similar items on the venturer's financial statements.






27. Large industry groupings.






28. 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.






29. Ratios that measure how efficiently a company performs day-to-day tasks - such as the collection of receivables and management of inventory.






30. The return that aninvestor earns during a specified holding period;holding period re turn with reference to a fixed-income instuument.






31. 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.






32. An equation expressing the equiva-lence (parity) of a portfolio of a call and a bondwith a portfolio of a put and the underlying -which leads to the relationship between put andcall prices






33. Making forecasts - estimates - or judgments about a larger group from a smaller group actually observed; using a sample statistic to infer the value of an unknown population parameter.






34. The relationship between the price of the underlying and an option's exercise price.






35. A quantity whose future outcomes are uncertain.






36. 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.






37. Unexpected earnings divided by the standard deviation of analysts' earnings forecasts.






38. A variation of a floating-rate note that has some type of unusual characteristic such as a leverage factor or in which the rate moves opposite to interest rates.






39. The duration without dividing by 1 plus the bond's yield to maturity. The term - named for one of the economists who first derived it - is used to distinguish the calculation from mod-ified duration. See also modified duration.






40. Assets used as benchmarks when applying the method of com parables to value an asset.






41. A set of observations on a variable's out-comes in different time periods.






42. A time series that is not covariance station-ary is said to have a unit root.






43. A con-flict of interest that arises when the agent in an agency relationship has goals and incentives that differ from the principal to whom the agent owes a fiduciary duty.






44. Options that are far in-the-money.






45. The share price at a particular point in the future.






46. A form of centralized risk management that typically encompasses the man-agement of a broad variety of risks - ind uding insuran -ce risk.






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






48. A variation of the market approach; considers actual transactions in the stock of the subject private company.






49. A decision rule for choos-ing between two investments based on their means and variances.






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