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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. 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.






2. A quantity - calculated based on a sam-ple - whose value is the basis for deciding whether or not to reject the null hypothesis.






3. The buyer of a derivative contract. Also refers to the position of owning a derivative.






4. Observations over individual units at a point in time - as opposed to time-series data.






5. A tax that is imposed by the importing coun-try when an imported good crosses its interna-tional boundary.






6. The principles governing equivalence relationships between cash flows with different dates.






7. Each component put option in a floor.






8. A listing in which tile order of tile listed items does not matter.






9. The estimation of an unknown value on the basis of two known values that bracket it - using a straight line between the two known values.






10. The ratio of cash dividends paid to earnings for a period.






11. Dummy variables used as dependent variables rather than as inde-pendent variables.






12. The reciprocal of a price multi-ple - e.g. - in the case of a PI E ratio - the 'earnings yield' E/ P (where P is share price and E is earn-ings per share) .






13. A country that during its entire his-tory has borrowed more in the rest of the world than other countries have lent in it.






14. To sell the assets of a company - division - or subsidiary piecemeal - typically because of bank-ruptcy; the form of bankruptcy that allows for the orderly satisfaction of creditors' claims after which the company ceases to exist.






15. A type of finance lease - from a lessor perspective - where the present value of the lease payments (lease receivable) equals the carry-ing value of the leased asset. The revenues earned by the lessor are financing in nature.


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






17. The financial state-ment that presents an entity's current financial position by disclosing resources the entity con-trols (its assets) and the claims on those resources (its liabilities and equity claims) - as of a particular point in time (the date






18. A quoted interest rate that does not account for compounding within the year.






19. 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.






20. With reference to regression analysis - the estimated values of the population intercept and population slope coeffi-cien t(s) in a regression.






21. The hypothesis to be tested.






22. An association or relationship between variables that cannot be graphed as a straight line.






23. When a bankrupt company is allowed to enforce contracts that are favorable to it while walking away from contracts that are unfa-vorable to it.






24. An option strategy that is equiva-lent to a short butterfly spread.






25. Agreements made by a company in bankruptcy under which a company's capital struc-ture is altered and/ or alternative arrangements are made for debt repayment; U.S. Chapter II bankruptcy. The company emerges from bank-ruptcyas a going concern.






26. The earnings per share that a busi-ness could achieve currently under mid-cyclical conditions.






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






28. Amounts owed to the company from parties other than customers.






29. A trade in two closely related stocks involving the short sale of one and the pur-chase of the other.






30. The probability that an asset's value moves up.






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 loan in which the borrower receives a sum of money at the start and pays back the entire amount with interest in a single pay-ment at maturity.






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






34. A reduction in the value of an asset as stated in the balance sheet.






35. Any outcome or specified set of outcomes of a random variable.






36. The risk associated with the uncer-tainty of how derivative transactions will be regu-lated or with changes in regulations.






37. Aka Liquidity discount.






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






39. Behavior on the part of a firm that allows it to comply with the letter of the law but violate the spirit - significantly lessening the law's effects.






40. An Activity ratio calculated as total revenue divided by average net fixed assets.






41. Investing on the basis of dif-ferential expectations.






42. A variation of a straddle in which the put and call have different exercise prices.






43. An approach to valuation that involves using a price multiple to evaluate whether an asset is relatively fairly valued - rela-tively undervalued - or relatively overvalued when compared to a benchmark value of the multiple.






44. The amount of variability pres-ent without comparison to any reference point or benchmark.






45. An event or piece of information that causes the marketplace to re-evaluate the prospects of a company.






46. A trader who offers to buy or sell futures contracts - holding the position for only a brief period of time. Scalpers attempt to profit by buy-ing at the bid price and selling at the higher ask price.






47. A strategic corporate goal repre-senting the long-term proportion of earnings that the company intends to distribute to shareholders as dividends.






48. P/E calculated on the basis of a forecast of EPS; a stock's current price divided by next year's expected earnings.






49. A result indicating that the null hypothesis can be rejected; with reference to an estimated regression coefficient - frequently understood to mean a result indicating that the corresponding population regression coefficient is different from O.






50. A measure of a bond's price sen-sitivity to interest rate movements. Equal to the Macaulay duration of a bond divided by one plus its yield to maturity.